
N26 will be leaving the UK - vinnyglennon
https://n26.com/en-de/blog/leaving-uk-does-not-change-our-global-vision-to-transform-retail-banking-for-the-better
======
danpalmer
Businesses pulling out of the UK based on the Brexit process is bad for the
UK, and I'm sure this was indeed mainly motivated by N26's need for a UK
banking licence, which is a costly and difficult process to go through.
However, it's worth noting that they are pretty small in the UK (~200k users).

They're very successful in Germany where banking is a very slow, difficult,
manually run industry (from what I've heard), but in the UK we have generally
very good banking infrastructure – payments are normally instant and free, and
there's a lot of consumer protection with things like the current account
switching service guarantee.

Startups such as Monzo and Starling started in this great infrastructure and
now offer relatively compelling products, while the incumbents are getting to
grips with modern tech and doing better than many people realise.

N26 on the other hand just didn't have a compelling offering. They charged for
most/all of their accounts (explicit charges for accounts in the UK are
uncommon), they lacked features, and their marketing was unremarkable compared
to the competition.

~~~
alibarber
I've recently moved from the UK to another European country, and whilst I
despise the way the politics is going back home - I'm amazed at how much
better banking is back in the UK. It's free to have an account and debit card,
often with a modest free overdraft. And transfers are really instant. As in I
can transfer from Barclays to Santander and by the time I've double-tapped
between bank apps the money will be there cleared, at any time of day.

Here it's 'transfer before 2pm and we'll send it the same _working_ day!!' And
that's once you've made your appointment a week out to open an account, and
maybe received everything after a few weeks (if they like you that is)...

I got the impression that N26 was mainly to challenge the latter way of
working. I didn't understand what their offer was even for a free account that
was better than even a 'legacy' bank in the UK (and I'm not sure they even
support direct debit - which would have made it useless for any super-cheap
energy/phone etc deals).

In all - yes Brexit sucks, yes they may have stayed in the UK without it
(although I wouldn't have expected them to introduce anything new), but I
don't think they can blame any lack of success in the UK on it.

~~~
satysin
Oh. My. God. YES!

I moved from the UK to France in 2018 (in part due to Brexit but that is a
longer story) and dear god the banking systems here are utter shit.

I am with HSBC and I can't even change the PIN on my debit card! Hell I
couldn't even get my card and cheque book (yes they still use cheques here!)
delivered to my address as it was a temporary one so I had to collect it from
my branch in person.

If I buy something on my card it takes at least _three_ days before it is
listed in the HSBC mobile app or web site.

I generally use cash so it isn't a huge issue for me (check my post history
for some explanation on why I mostly use cash) but god is banking frustrating
here.

The only positive is that I do have an actual account manager (as in the same
person) who I always deal with and he is _excellent_ at sorting my problem. I
have to say I do like that consistent human content. Obviously if it is an
emergency I use their emergency line (lost card, etc) but for general
inquiries that don't require instant action my account manager is my go to.

 _(thank you for bringing this up I feel I needed this quick rant!)_

~~~
_-___________-_
> If I buy something on my card it takes at least three days before it is
> listed in the HSBC mobile app or web site.

That's actually the case for my HSBC UK account too. It's impossible to know
accurately what the balance of it really is at any time too; both the real
balance and the available balance fluctuate wildly with no obvious relation to
the transactions, which are delayed by a variable 1-3 days (presumably
depending on the type of transaction). They seem to be about ten years behind
all the startup banks.

~~~
philpem
It seems to be a thing for all the incumbent UK banks I've tried. CYBG/B (now
the second incarnation of Virgin), Lloyds, Halifax, NatWest -- all have that
3-day delay.

Instant update was the killer feature that swung me to Starling. Well, that
and Natwest calling some random guy (who later found me to tell me what
happened) for a sales call, only to give him the transaction data for my last
five transactions....!

(obFD: no pecuniary interest, just a happy customer)

------
tablloyd
I'm skeptical of Brexit being the reason that N26 is withdrawing from the UK.
They started operation in the uk in October 2018, over 2 years after the
referendum result and 6 months before the UK was meant to leave until the date
got pushed back.

~~~
threeseed
Not sure if you actually follow Brexit but the situation now is completely
different to the last 2 years.

Michael Gove this week formerly advised businesses that the UK is going down
the hard Brexit path i.e. leaving the customs union, single market and with
full regulatory divergence from the EU.

Under these circumstances it is impossible to run a business like N26 in the
UK serving the EU.

~~~
blibble
> Under these circumstances it is impossible to run a business like N26 in the
> UK serving the EU.

you have this the wrong way round: they are a bank based in the EU that was
passporting their German (EU) license into the UK

in the near future they will not be permitted to operate in the UK as the UK
will no longer accept their EU banking license

~~~
thu2111
That's not actually certain. The UK has no fundamental reason not to recognise
EU banking licenses, although it may choose not to, or to recognise it but
require additional compliance.

The UK may end up being 'forced' to not recognise such licenses in retaliation
if the EU refuses to recognise British licenses. This is quite likely to
happen because the EU has a track record of revoking financial licensing as
part of trade wars with European countries. For instance they revoked
acceptance of Switzerland's financial licenses as part of trying to pressure
the Swiss government to cede significant powers to Brussels.

~~~
blibble
> That's not actually certain.

well, you can argue but it's a matter of UK law:
[http://www.legislation.gov.uk/uksi/2018/1149/regulation/2/ma...](http://www.legislation.gov.uk/uksi/2018/1149/regulation/2/made)

the PRA has stated that EEA firms will require a license (with some temporary
transition arrangements:

> Passporting rights will now cease at the end of the transition period. Once
> passporting rights cease, EEA firms currently operating through a passport
> in the UK under the existing European passport framework will require a Part
> 4A permission under the Financial Services and Markets Act (FSMA) to be able
> to continue carrying out regulated activities in the UK.

see [https://www.bankofengland.co.uk/eu-withdrawal/temporary-
perm...](https://www.bankofengland.co.uk/eu-withdrawal/temporary-permissions-
regime)

> This is quite likely to happen because the EU has a track record of revoking
> financial licensing as part of trade wars with European countries. For
> instance they revoked acceptance of Switzerland's financial licenses as part
> of trying to pressure the Swiss government to cede significant powers to
> Brussels.

this is the worst example possible you could have given, the result of the
loss of equivalence was that the Swiss gained business, while EU firms lost
business

------
Zenst
As somebody who lives in the UK (London area), I've never even heard of this
company N26, let alone aware that they had UK operations.

I do frequent the web, youtube, bus stops, tubes, trains and utterly exposed
to all forms of marketing.

So from my perspective, this does seem like marketing failure from the start -
at least from my perspective.

Though the only real new Bank in the UK to do well, traction wise would be
Metro Bank and that's only due to them having a solid high street offering and
more so niche in that they are open near on all hours. Also associated app and
online works well.

But sorry, never even heard of N26 and is it initialy appears to tweak my
interest that it may be something N64 related, would of at least had me
read/look into it beyond that. Not even that happened, until now and only
reinforces the lack of marketing carried out as testified by the aspect that
I've never heard of them until now.

That's a shame as marketing is usually an area in which startups/companies
tend to overdo more than not do at all.

~~~
jen20
> Though the only real new Bank in the UK to do well, traction wise would be
> Metro Bank

This probably indicates that you are not in fact as well exposed to bank
marketing as you suspect - it's hard to argue that Monzo and Revolut have not
done well.

~~~
twic
Let's look at various banks' total assets, as listed on this random website i
found [1], in millions of pounds:

    
    
      Monzo                 139.82
      Starling              206.64
      Marks & Spencer      5569.90
      Ulster              11641.00
      Metro               21647.00
      Co-operative        23102.80
      Coutts              34280.00
      Clydesdale          43583.00
      HSBC (retail)      238939.00
      Barclays (retail)  251305.00
    

On that measure, at least, Metro Bank is a hundred times bigger than either
Monzo or Starling. Assets are not the whole story, of course; i'd be
interested to see numbers for customers, revenues, and some sort of
measurement of payment flow.

But i think the lesson here is that if you live in the London tech bubble,
it's easy to think that Monzo are huge. Many of my friends bank with Monzo,
and i see plenty of Monzo cards being tapped on the readers at the tube
station. But we are not representative of the country at large.

[1] [https://thebanks.eu/banks-by-country/United-
Kingdom](https://thebanks.eu/banks-by-country/United-Kingdom)

~~~
p10jkle
According to the website, that Monzo stat is two years old. monzo.com shows
the current customer count - 3.8 million ie 10% of the adult population of the
UK.

According to
[https://www.thisismoney.co.uk/money/saving/article-7647253/M...](https://www.thisismoney.co.uk/money/saving/article-7647253/Monzo-
accounts-half-UK-digital-challenger-bank-market-data-finds.html) Monzo has
over half the challenger bank market share

------
butler14
Out-competed by Monzo/Starling/Revolut and co. and blaming Brexit.

Not the first to use that excuse, and certainly not the last.

~~~
buboard
do you know if these offer services to EU customers? and specifically business
accounts?

~~~
benhurmarcel
Only Revolut offer services in the EU.

------
eugenijusr
This is not the first market this bank has pulled out from. A couple of years
ago they stopped signing up people from two EU markets they previously served
(Latvia and Lithuania) without any reason. Granted all existing accounts
remained untouched, still these accounts get somewhat crippled functionality
and their future is unclear. Although their app is great and I didn't have any
big issues with the service itself, I'm somewhat wary of keeping any larger
sums of money in my N26 account.

~~~
s_dev
>I'm somewhat wary of keeping any larger sums of money in my N26 account.

It's German. All savings are guaranteed by German gov up to €100k. This is not
the case with Monzo or Revolut.

~~~
acta_non_verba
True. They’re protected up to £85,000 by the British Government instead.

~~~
zeku
They claim 250k USD in the US, via their partner Axios Bank.

"All deposits are FDIC-insured through our partner bank, Axos Bank®, Member
FDIC."

------
thawaway1837
Our company has opened several new Amsterdam offices thanks to Brexit already.
Currently they have probably added low double digit jobs in Amsterdam, and cut
single digit jobs in the UK (explicitly related to Brexit...net jobs in the UK
are probably even).

This may not sound like a lot, but for a company that operated in every EU
country, but only had a single office, in London, that employs 1000s of really
well paid employees, and had no plans at all to change anything, it’s a huge
step.

At the very least, London now has competition from Amsterdam in terms of
European work, and EU employees will likely prefer moving to Amsterdam with
free movement than to London with the hassles involved.

And this is right at the beginning of Brexit at a time where nothing has
actually changed thanks to the 1 year continuity period. If the deal that the
UK strikes a year from now (which is only likely to make things worse) is
substantially bad, then things may change very rapidly.

Brexit was a decision by a generation that did not fight the wars, but always
wished they did and that greatly benefited from the EU, but their desire to
believe that they were being oppressed and they had to throw off the shackles
from the oppressors, like their ancestors did, led them to screw the newer
generations while they themselves are at the end of their lives and will
barely suffer from the consequences.

~~~
imtringued
The initial step is always the hardest. Choosing a suitable location for your
EU presence can be a difficult task and if you can do everything from your HQ
there is no reason to even find one. But once you have paid that cost upfront
then you can arbitrarily choose to expand in either UK or EU (whichever makes
the most sense).

------
SpeakMouthWords
Worth noting that N26 was touted for a while as a grim reaper that would come
to the UK with its vast capitalisation (at the time about 2-3x as a much as
any UK mobile bank) and blow Monzo and Revolut away.

A good lesson that a well-funded incumbent in another market can't always make
the hop to a different geography with assured success.

~~~
andy_ppp
I mean giving up so easily when they have the capital to become a bank in the
UK is really the issue here. Sure, it would have been harder than inside the
EU, the real story is about them having no customers :-)

------
seemslegit
Well, unlike some N26 users who get their accounts locked without warning
explanation or anyone to turn to - at least the UK gets a notice.

~~~
btzll
Could you expand? People get their accounts locked for no reason?

~~~
seemslegit
Well there was probably a reason but they weren't told it and with N26 being
online-only had noone to turn to, you can do a google/twitter search for
someone getting police called on them for showing up at their Berlin
HQ/Backoffice trying to get some answers.

~~~
bpfrh
To be fair, that is nothing unique to N26.

In fact in austria easybank is also a bank that afaik only exists "online" and
easybank is much older than n26.

Edit:

Forgot something

~~~
seemslegit
To be even fairer, this isn't even unique to online banks - regular banks in
the US can "fire" customers without a reason and even if only because their
heuristics find their profitability to be too low, but at least they get a
notice and a chance to move their money.

------
ArmandGrillet
> we’ve already fully redesigned our mobile experience to simplify the actions
> that matter most to customers

I couldn't contain my laugh reading that, sending money using the N26 app is a
12 steps process (no exaggeration) since the app update and the "AI" behind
the categorization of spendings is an amazing garbage, e.g. I have a once a
month recurring payment of the same amount from my landlord, I have
categorized it a dozen of times manually but it still gets registered as...
grocery shopping.

~~~
Cenk
> sending money using the N26 app is a 12 steps process

Not sure if we’re in different A/B test buckets or you’re in a different
country and are using a different version but it’s four to five taps for me?
Unless you’re counting the log in button and typing the amount as separate
steps?

~~~
ArmandGrillet
Connect, Manage, Money Transfer, Choosing one, Naming it, Verification, Send,
Identity Verification, Confirmation of Identity Verification. So 9
views/steps.

~~~
Cenk
Okay, we must have different versions of the app. On mine: Actions -> Bank
Transfer -> Choose Recipient -> Enter amount -> Message -> Send -> Confirm

The real question is, which one of these do you think is unnecessary?

------
axaxs
N26 just launched in the US, also. If their UK launch was anything like their
US launch, I can see why. They made a lot of promises about how much better
they'd be, but their offering is terrible compared to the competition here.

------
Symbiote
> With the UK now having left the European Union, we will in due course be
> unable to operate in the UK with our European banking license.

Isn't this still up for discussion?

Since they're only giving two months notice, they could wait until much later
in the year before shutting up shop in the UK.

~~~
threeseed
Not really. Gove is warning businesses that there will be trade impacts:

[https://www.theguardian.com/politics/2020/feb/10/checks-
on-e...](https://www.theguardian.com/politics/2020/feb/10/checks-on-eu-bound-
goods-inevitable-gove-tells-business-leaders)

And if you don't have a deal on goods you absolutely won't have a deal on
services.

~~~
nailer
Sure but trade is two way. The EU won't have a deal either. They want to
continue selling cars, food, and everything else. The only thing with no deal
being on the table is the UK being able to walk away, as a type of mutually
assured destruction, rather than having to accept any deal offered by the EU.

------
scarejunba
The comments here are odd. N26 isn't making any political statements. They're
just saying they don't want to apply for a UK banking licence now that they
can't use an EU one.

The response "they're only doing this because they can't make enough money in
the UK" seems kind of vacuous. Of course that's why they're doing it. The cost
of requiring a UK licence outweighs the benefit of being there.

There seems to be some sort of desire to say "Brexit didn't cause this". It's
pretty clear it did because they could previously operate without a UK licence
and now they can't and it doesn't cost low enough to be worth it for them. I
don't think it matters in the big scale since there's Monzo and Starling, but
having the EU fracture will be annoying since markets will fracture.

As for the criticisms of starting in the UK post the Brexit vote, I don't
understand if you guys have run businesses before, but you have to take risks.
Things can change, and for the right growth opportunity you go for it.

As an example, post-GDPR I set up the European arm of our data business, and
even though Brexit was on the horizon, we set up in London. Why? Because the
opportunity was big enough and we could work our way to a solution in time
that would meet what we needed and because (being entirely Anglophone)
establishing a bridgehead in the UK made sense. It's a successful business now
and we have teams in mainland Europe now. It's like running towards one of
those closing doors so that you can slide under it like a hero. You don't want
to be trapped under the door, but sometimes what's on the other side of the
door is worth the risk.

~~~
barnabee
It’s not so much “Brexit didn’t cause this” as it is hard to believe that’s
the main reason their business failed in the UK (make no mistake, that is what
they are admitting, whatever the reason). The comments are quite reasonably
identifying that their statement is conveniently burying the real news with an
excuse that will surely be easy to swallow in their home country.

Brexit is bad but that isn’t the news here. I’m sure we’ll see plenty more of
this.

~~~
scarejunba
It certainly doesn't look like they're burying anything to me. The official
media statement squarely accepts the inability to serve as an N26 problem:

> _While we fully respect the decision that has been taken, it means that N26
> will in due course be unable to serve our customers in the UK and will have
> to leave the market_

And having some part of the business fail is not some sort of moral failing
you have to hide or which they're even attempting to. The rest of their
statement makes it clear that considering their growth and number of users it
doesn't make sense for them to get a UK licence, i.e. this isn't feasible for
them.

I think people are interpreting "We can't do this because Brexit has made this
infeasible for us" as "We'd have succeeded if it weren't for Brexit" when it
seems quite obvious to me that the trivial interpretation is "Brexit moved us
from feasible to infeasible" which just means they were envisioning less in
the future than the Brexit-costs would impose and makes no implication really
about the width of that Brexit cost boundary. After all, they're still in the
US and you need a local licence.

------
jxramos
Guess the value and quantity of their UK customers didn't warrant obtaining an
equivalent "UK banking license"?

> ... we will in due course be unable to operate in the UK with our European
> banking license.

------
treebornfrog
Sad news, I've been using them for over a year, their card design is the most
beautiful I've seen yet in the UK (1).

(1)
[https://miro.medium.com/max/4000/1*XScUHKRVuzfiRKttAfJ64w.pn...](https://miro.medium.com/max/4000/1*XScUHKRVuzfiRKttAfJ64w.png)

~~~
detritus
Mmm, not sure I'd agree with your estimation, but "beauty is in the eye of the
beholder" and all that. Seems a little form over function to me - I'm not sure
how wonderful an idea it is being able to read the three security digits on
the reverse.

Not sure if I'm just paranoid, but I scrape those off every time I get a new
card.

~~~
Hamuko
The CVC is behind the MasterCard logo on my N26 card.

~~~
detritus
That would work!

------
gadjo95
Rumor is that they are also going to cancel their launch in Brazil. I think
they are just re-focusing and trying to make money instead of burning it.
Launching in a new market is always expensive.

~~~
zorked
TBH the neobank market in Brazil is kind of crowded and N26 doesn't have
anything over those that started sooner.

~~~
bloodm
Would you be so kind to give an overview over it (Brazil, both banks and
brokers), incl. a recommendation? Thx

------
greatgib
I understand their reasons, but I think that it is an abuse from them to close
UK customers so fast. Imagine loosing your bank account suddenly in just 1
month. From what I see, nothing prevents N26 to continue operating until the
end of the year in UK. So, they could have given a 3 or 6 months notice at
least to their user. I'm not in UK, but because of actions like this, I'm more
than encouraged to not be confident with them and not use this as a "primary
account".

------
Causality1
"A 100% digital banking experience"

I know this isn't the exact focus of the post, but I find that a little
terrifying. I wouldn't be willing to trust all my holdings to a computer
system with no ability to walk into a building with my birth certificate,
photo ID, and social security card and have someone give me back my accounts
should my identity be stolen.

~~~
barnabee
I moved to Monzo as soon as they got a banking license and wouldn’t want to go
back to an old bank with branches. Not only is their tech terrible but
someone’s got to pay for all those buildings and people.

------
LockAndLol
Compared to Revolut, they're pretty expensive. Additionally, their app doesn't
work without google services like Revolut does, so you're completely crippled.
And finally, their app doesn't look as good, nor does it have a view of your
expenses.

This isn't a big hit to England.

------
nottorp
We are today a team of more than 1,500 unique talents of 80 nationalities,
based across our offices in Berlin, Barcelona, Vienna, New York and São Paolo.

Looks easy for them to leave the UK. No offices there.

Anyone shutting down UK offices yet?

------
monkeydust
Think they just found the UK more competitive and advanced than what they
expected. They could have got a UK licence but perhaps better ROI elsewhere.
Don't think the UK loses much here.

------
symboltoproc
Can anyone explain why they can not get a UK bank license and migrate their
customer to the UK bank?

I suspect that the main motivation is not Brexit but fiercer competition in
the UK (e.g. Monzo).

~~~
ztratar
Migrating banks puts your users through a migration themselves (new terms,
transfers, new issued cards, etc). It's very difficult.

On top of that, their UK business wasn't doing very well.

So why double down on a losing bet and go through a ton of pain for it?

------
nilanp
TransferWise.com/borderless is a pretty neat solution to a few of the problems
N26 was solving. Anyone here - tried it out ?

Disclosure: Been building this for 6 years :-)

------
xvilka
Despite thinking Brexit was a mistake, this is indeed a chance for the UK to
modernize and improve its financial and banking industry, to make it even more
attractive for non-EU capital, and to make London an even more international
city. Assuming there is a will for that. After all gov.uk initiative was a
success and still continues to improve.

------
frostyj
probably just a company not big enough to deal with too many financial
regulations.

~~~
Benjammer
Uhm, they raised 300m on a 2.7b valuation somewhat recently...
[https://techcrunch.com/2019/01/09/n26-raises-300-million-
at-...](https://techcrunch.com/2019/01/09/n26-raises-300-million-
at-2-7-billion-valuation/)

Not exactly small.

------
iamspoilt
I am wondering if Revolut would follow the course as well?

~~~
buboard
revolut is based in britain

------
wdb
I didn't even knew N26 was active in the UK.

------
kalium_xyz
N26 has little on bunq though

------
carlsborg
This is bad for innovation.

------
B008L355
who?

------
ghastmaster
The font on that page does not scale well.

------
3fe9a03ccd14ca5
Brexit makes for a convenient scapegoat when your business isn’t compelling to
U.K. customers.

~~~
jamil7
You might be right, here in Germany the banks are extremely archaic and make
things difficult if you're a foreigner and just moved here. N26 onboarding is
streamlined (video call on your phone) and can be done in at least English and
German, maybe other languages now they're expanding. They also invested
heavily in native mobile experience first while the other banks where
struggling to offer decent online banking.

~~~
dividuum
Not sure how that's today, but a few years ago their "mobile experience first"
stuff resulted in quite some security issues:
[https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money](https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money).
That alone would be enough for me to not trust them with any of my money.

~~~
jamil7
Yeah I've seen the presentation thanks. I'm also not sure how their security
stands today but theres no reason "mobile first" has to mean "bad security".

------
Rhardward
Seem like another way of saying "We failed in the UK so lets blame it on
Brexit"

Haven't heard of anyone being a customer of N26.

