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N26's withdrawal from the UK is boosting competitors' deposits and customer bases - Business Insider

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The windfall from N26's retreat is an immediate boon for all neobanks – but its sudden exit could jeopardize consumers' faith in neobanks overall

three new partners to its growing business marketplace earlier this month, bringing its total partners to 24.

The neobank also reported reaching 1.25 million accounts and £1.25 billion in customer deposits. A sudden surge of new business could hardly come at a better time, as Starling now has both a stronger offering and the funds to push for further expansion. And this rise in potentially very satisfied customers could contribute resoundingly to helping the bank reach its goal of breaking even by the end of 2021.

However, even for the neobanks enjoying the spoils of N26's capitulation in the UK, the German neobank's sudden exit could cut both ways. While the spiking customer and deposit totals are certainly a big win for homegrown UK neobanks, N26's sudden departure could shake UK consumers' conception of the stability of neobanks overall by causing consumers who were considering a neobank to worry that it will close in the future, leaving them high and dry.

If the overall pool of prospective new clients shrinks going forward as a result, all UK neobanks will suffer as the competition gets tighter in their home market — outweighing the boosted deposit and customer totals Monzo, Starling, and Monese are seeing right now., Business Insider Intelligence's expert product suite tailored for today's decision-makers in the financial services industry, delivered to your inbox 6x a week.

 

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