Just over two years since its U.S. launch, German digital bank N26 has announced that it will be closing its operations for good in the States. As of January 11, 2022, the bank’s half-million U.S. customers will be shut out of their app and have their accounts closed.
The implications of N26’s withdrawal from the U.S. market are still the subject of much debate. Despite the company’s recent $9 billion valuation, it pulled out of the U.K. at the outset of 2020, citing low recruitment numbers and complications due to the ongoing Brexit negotiations. Now, with its second withdrawal from a major Anglophone market, experts are wondering whether this is a deliberate pullback from globalization in the interest of financial insularity, particularly given the abandoned international expansions of firms such as Robinhood.
Naturally, there is a vocal faction of financial minds that decry any hasty generalizations about such a dramatic reversal in market trends. Fourthline Co-Founder and Chief Executive Officer Krik Gunning describes N26’s shift to focusing on European opportunities as purely practical, especially given the fintech’s 2020 staff layoffs in the wake of the COVID-19 pandemic. With announced plans for expansion into Eastern Europe and new investment products, it’s easy to see how N26’s departure from the U.S. makes financial sense.