N26 Abandons US Ambitions
(18 November 2021 – USA) German digital bank N26 is to shut down its US operations in order to sharpen its focus on its European business.
The app-based bank opened for business in the US in July 2019 and has amassed 500,000 customers, who must now find a new banking partner before the shutters come down on 11 January.
The firm says its renewed focus on its European operations will enable it to move into new verticals to include investment products in the coming year.
In a statement, the company says: "On top of strengthening its core business operations in Europe, where digital banking adoption continues to be in its infancy, N26 is also assessing future expansion into additional markets in Eastern Europe in response to growing customer demand in the region."
N26 last month raised more than $900 million in a Series E funding round that values the German digital bank at over $9 billion. However, the fast growth has come at a cost, with the bank facing heightened scrutiny from German regulatory authorities and a revolt from hard-pressed staff who last year moved to set up a 'Works Council' amidst claims that trust and confidence in the digital bank's management were at an "all time low".
The run in with German regulator BaFin has led to the imposition of a €4.5 million fine and a temporary cap on new customer sign ups as it works to improve its internal compliance controls to meet anti-money laundering obligations.
The withdrawal from the US comes two years after the bank pulled out of the UK market due to Brexit-related constraints and follows on from fellow UK challenger Monzo's decision to abandon plans to acquire its own banking licence in the US.
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