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.
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.
N26 is also very successful in France, whose banking industry is--I can confirm--very much slow, difficult, and _very_ manually run. They can charge fees for accounts because their fees are still so much lower than the incumbents they're displacing. (And you can do stuff without having to talk to your bank counsellor, at your one specific branch, in person... how novel!)
So I can see how their model wouldn't be very good, or very disruptive, in places with more consumer-friendly banking options.
Anecdote time - the only person I know who had an account (I work in London fintech at the moment) never used it and only opened it for the fancy translucent card. He seems to have accounts with all the 'challenger' banks.
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.
This is the problem, no one believes the draw backs of leaving the EU even when businesses are literally pulling out of the country and directly saying it's because of regulatory divergence. It used to be that you could access 500m customers with one set of regulations. Now you can access 450m customers with one set of regulations, and you can access 60m with another, as yet undefined, set of regulations that are guaranteed to change over the next few years. It doesn't take a genius to see that that uncertainty is going to take a toll on business, but it does take a planet brain genius to know that's happening, hear from actually businesses making decisions based on it, and then decide it's not really an issue.
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.
I agree with your skepticism, but it's important to note that Brexit being pushed back implied that it might not happen, or that it might be very soft. It wasn't certain until a couple of months ago, when the vote effectively reaffirmed Brexit (or at the very least, that the Remain vote was so badly confused as to make it a fait accompli).
So there is almost certainly more going on here than Brexit, but there's also a chance that they were hoping that a soft/nonexistent Brexit would create a more favorable environment.
In fairness, only last month did the exit date become completely certain. The UK has now “left”, on paper, and in practice it leaves at the end of this year. If they were waiting until there was no more uncertainty, this is the perfect time almost.
Not if they were thinking that their European license would still work post Brexit and will have an easy path to conversion of that license when needed. Seems like a reasonable assumption.
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.
> 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.
I'm still trying to understand the point of your comment, but regardless: You haven't heard of it. So what? People will be affected by this. This will also not be the only company who will have to leave the UK because they've deemed the cost of legalising their business there after Brexit is not worth the benefits. So you're either in denial about that fact or you think it doesn't matter, which perhaps works for you as a schadenfreude for the people affected? I don't get it.
I recently split a restaurant bill with 7 other early-twenty-somethings. I think 5 of us had Monzo (making things much easier). They have been immensely successful among the younger demographic. Monzo have been doing a lot of advertising on public transport in my city (can't speak about online ads because I don't see them).
I know one person who uses N26 but he's from Germany, where I believe it's a lot more popular.
Starling, Monzo, Revolut and N26 seem to basically be at feature parity with each other and their apps are incredibly similar.
Both Monzo and Revolut have over 3m customers compared to 1.7m for metro bank. Starling is over 1m. So plenty of traction all for the challenger banks.
> 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.
Funny and surprising you say this since I just saw a large N26 billboard in the London Tube Station at Angel Station; very unmissable as a Londoner using the tube these days.
Interesting. Maybe it's a demographic blind spot? I do all of my UK banking on Transferwise, and so have heard of or researched Revolut, N26, Monzo... In fact, I think that both Monzo and Transferwise are UK based, and I've definitely seen their ads in the tubel, know people who work there, etc.
They also offered a solid metal card and lounge-access perks, so I suspect that their core demographic are young-ish "digital nomads". Maybe that's where most of their marketing went to?
> 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.
They're a huge presence in mainland Europe, especially Germany, where they're the de facto bank of choice for all non-European immigrants living in Berlin, Munich, etc.
Another is that the imposed costs of Brexit e.g. compliance, privacy, data sovereignty especially since we are heading down the no-deal path make it too costly to compete.
And fully agree that it won't be the last business to find it uneconomical to compete in the UK due to Brexit.
Yeah, I was thinking the same... along with "don't let the door bang behind you on the way out". Not that I voted for Brexit - quite the opposite as it happens, and I'd be a lot happier if we were still in the EU - but I don't have much patience with questionable excuses from businesses who failed to effectively compete with other companies in their space.
If they were running a commercially viable operation in the U.K., or had realistic hopes of doing so in the foreseeable future, of course they'd have applied for a UK banking license. The only reason not to do so is if that isn't the case.
Brexit has nothing to do with it, and I suppose we learn again that success requires more than just hubris and a truckload of money.
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.
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.
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.
> 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.
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.
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.
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.
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".
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.
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.
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.
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.
[+] [-] danpalmer|6 years ago|reply
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|6 years ago|reply
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.
[+] [-] _n_b_|6 years ago|reply
So I can see how their model wouldn't be very good, or very disruptive, in places with more consumer-friendly banking options.
[+] [-] Nursie|6 years ago|reply
[+] [-] tablloyd|6 years ago|reply
[+] [-] Traster|6 years ago|reply
[+] [-] threeseed|6 years ago|reply
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.
[+] [-] jfengel|6 years ago|reply
So there is almost certainly more going on here than Brexit, but there's also a chance that they were hoping that a soft/nonexistent Brexit would create a more favorable environment.
[+] [-] billpg|6 years ago|reply
[+] [-] TazeTSchnitzel|6 years ago|reply
[+] [-] whoisjuan|6 years ago|reply
[+] [-] themagician|6 years ago|reply
[+] [-] trekrich|6 years ago|reply
[+] [-] Zenst|6 years ago|reply
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|6 years ago|reply
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.
[+] [-] princekolt|6 years ago|reply
[+] [-] krilly|6 years ago|reply
I know one person who uses N26 but he's from Germany, where I believe it's a lot more popular.
Starling, Monzo, Revolut and N26 seem to basically be at feature parity with each other and their apps are incredibly similar.
[+] [-] MrAlex94|6 years ago|reply
They've had ads plastered all over central London tube stops.
[+] [-] threedots|6 years ago|reply
[+] [-] rvz|6 years ago|reply
Funny and surprising you say this since I just saw a large N26 billboard in the London Tube Station at Angel Station; very unmissable as a Londoner using the tube these days.
[+] [-] SirHound|6 years ago|reply
[+] [-] mr_isomies|6 years ago|reply
They also offered a solid metal card and lounge-access perks, so I suspect that their core demographic are young-ish "digital nomads". Maybe that's where most of their marketing went to?
[+] [-] chimeracoder|6 years ago|reply
They're a huge presence in mainland Europe, especially Germany, where they're the de facto bank of choice for all non-European immigrants living in Berlin, Munich, etc.
[+] [-] tempsy|6 years ago|reply
[+] [-] jrv|6 years ago|reply
I'm not in the UK, but isn't Monzo also doing quite well?
[+] [-] drcongo|6 years ago|reply
[+] [-] noobermin|6 years ago|reply
[+] [-] mrjohnes|6 years ago|reply
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[+] [-] TLightful|6 years ago|reply
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[+] [-] butler14|6 years ago|reply
Not the first to use that excuse, and certainly not the last.
[+] [-] threeseed|6 years ago|reply
Another is that the imposed costs of Brexit e.g. compliance, privacy, data sovereignty especially since we are heading down the no-deal path make it too costly to compete.
And fully agree that it won't be the last business to find it uneconomical to compete in the UK due to Brexit.
[+] [-] bartread|6 years ago|reply
If they were running a commercially viable operation in the U.K., or had realistic hopes of doing so in the foreseeable future, of course they'd have applied for a UK banking license. The only reason not to do so is if that isn't the case.
Brexit has nothing to do with it, and I suppose we learn again that success requires more than just hubris and a truckload of money.
[+] [-] imtringued|6 years ago|reply
[+] [-] buboard|6 years ago|reply
[+] [-] eugenijusr|6 years ago|reply
[+] [-] thawaway1837|6 years ago|reply
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.
[+] [-] SpeakMouthWords|6 years ago|reply
A good lesson that a well-funded incumbent in another market can't always make the hop to a different geography with assured success.
[+] [-] seemslegit|6 years ago|reply
[+] [-] ArmandGrillet|6 years ago|reply
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.
[+] [-] axaxs|6 years ago|reply
[+] [-] Symbiote|6 years ago|reply
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.
[+] [-] scarejunba|6 years ago|reply
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.
[+] [-] jxramos|6 years ago|reply
> ... we will in due course be unable to operate in the UK with our European banking license.
[+] [-] treebornfrog|6 years ago|reply
(1) https://miro.medium.com/max/4000/1*XScUHKRVuzfiRKttAfJ64w.pn...
[+] [-] gadjo95|6 years ago|reply
[+] [-] greatgib|6 years ago|reply
[+] [-] Causality1|6 years ago|reply
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.
[+] [-] LockAndLol|6 years ago|reply
This isn't a big hit to England.
[+] [-] nottorp|6 years ago|reply
Looks easy for them to leave the UK. No offices there.
Anyone shutting down UK offices yet?
[+] [-] monkeydust|6 years ago|reply