The UK has officially left the EU. Now, a huge European FinTech company has pulled the plug on its British operations.
German challenger bank N26 announced on Tuesday, February 11, that it will shut down all its UK accounts by April 15 due to Brexit.
Because of the British exodus from the trading bloc, N26 will be unable to operate in the UK after the end of the transition period with its current licence. The transition period ends on December 31, 2020.
N26 has advised customers to transfer their money to an alternative bank before the April deadline. It also asked customers with negative balance to top up their accounts. No new accounts will be opened between now and April 15.
“With the UK having left the EU at the end of January, we will in due course no longer be able to operate in the UK with our European banking licence,” the bank wrote in a statement. “Therefore we will be leaving the UK and closing all accounts in the coming months. We’ve planned the next steps carefully to ensure this process is as smooth as possible.”
N26 stated that it decided against applying for a UK licence due to the complexities involved, according to City A.M..
UK financial firms have previously expressed concerns that they would lose their passporting rights after Brexit, meaning they would not as easily be able to provide their services in the EU after the UK’s divorce from the EU.
The passporting rights are regulated in the Markets in Financial Instruments Directive (MiFID II).
It also already seems like Brussels is looking to change MiFID II, removing some of the concessions made to the UK when the legislation was created, with EU officials having reportedly flagged that the changes are approaching.
N26 boasted in January that it had attracted 250,000 customers in the US after launching its stateside operations in August 2019.
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