Hi, I’ve noticed that N26 is limited regulated by Prudential. What does this mean? I’m guessing Monzo and Starling and the other mainstream banks are fully regulated what’s the difference cant find details anywhere
I believe that its because it is fully regulated by the German Federal Financial Supervisory Authority called BaFin (or by its long name: Bundesanstalt für Finanzdienstleistungsaufsicht).
Ok thankyou. So if it they go bust Il have to go through them? I wonder if they will be fully regulated here in the UK.
They are protected by the German Deposit Guarantee Scheme operated by the Enschädigungseinrichtung deutscher Banken GmbH, and not the UK based Financial Services Compensation Scheme, but I hardly feel it would be any harder to submit a claim to them than to the UK regulator as all the information needed to claim is on the Entschädigungseinrichtung website.
If you ever need to complain, N26 have the same 8 week reply time as any UK company would. You can still complain to the UK Financial Ombudsman about them as you would any UK bank.
Taken from the N26 UK terms and conditions.
A17.1.2 If you are not satisfied with the outcome of your complaint, you can refer this, free of charge, to the Financial Ombudsman Service, which is an independent expert in settling complaints between consumers and financial services providers. You can write to the Financial Ombudsman Service at Exchange Tower, London, E14 9SR, visit their website at www.financial-ombudsman.org.uk, email them at email@example.com or call them on 0800 023 4567 (0300 123 9123 from mobile phones).
For some background, the EU has a system called “passporting” - if you have a banking license in one EU/EEA country, you can talk to the regulators in another one, and ask nicely if they’ll let you have one in that country as well.
“Limited” is a bit of a confusing term here, but what it means is that if you have a passported license, you actually still report to the regulator in your original country (BaFin in this case), while the PRA keeps an eye on you to make sure you’re following the local rules properly. They then reckon BaFin will do just about as good of a job as the FCA would with the rest.
If you want to know more, the Bank of England (which the PRA is a part of) has an overview here, or if you want something more indepth, check out the European Banking Authority’s page on it (kind of a heavy read, but interesting!).