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Challenger bank shuts up shop in UK amid uncertainty
Digital bank Fidor is ending its time in the UK, blaming uncertainties in the market
Fidor bank is closing its doors in the UK because of uncertainties in the local market as the digital challenger bank’s sale by French banking group BPCE nears completion.
The bank, which came to the UK in 2015, said it will end its UK operations in just over two months’ time.
“Due to the uncertainties surrounding the UK market, we have decided to withdraw our product and service offering in the UK on 15 September 2019,” said Fidor in a statement on its website.
Although it does not cite Brexit directly, many fintechs are preparing for life after the UK leaves the EU single market, which is vital to financial services firms that want to operate across Europe.
Fidor, which is one of the earliest digital pioneers in the banking sector, was launched in Germany in 2009. It uses social media to overcome the cost and complexity of traditional banking, while increasing customer trust through an online community.
The decision to quit the UK comes as Fidor’s troubled ownership by BPCE nears an end. BPCE put Fidor up for sale in November and the challenger’s founder, Matthias Kröner, subsequently left.
One source said BPCE never really had a strategy on how to take Fidor forward. BPCE was formed from a merger of two centuries-old French banks, and as a result, its culture was not able to truly integrate a company like Fidor, the source suggested.
Kröner had high hopes for Fidor after its takeover by BPCE. In an interview with Computer Weekly after the acquisition was completed, Kröner said the bank’s acquisition by BPCE meant it had adopted an “attack formation”.
He said the acquisition had taken Fidor from being a potential challenger to a real threat to the status quo in retail banking.
Also at the time of the acquisition, BPCE chairman François Pérol said: “This is a key step in the acceleration of the digital transformation of our group. It further demonstrates our commitment to innovation, to developing a customer-centric approach enabled by digital banking technology, and to be more involved in the digital and mobile banking field.”