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UK-based neobanks Monzo, Starling, and Monese are seeing surges in transfers and customers as displaced customers of German neobank N26 seek a new bank, AltFi reports.

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N26 announced on February 11 that it would close all UK accounts and withdraw from the market due to Brexit. Monzo reported a 250% spike in payments made into Monzo from N26 that day; Starling said it saw a jump in customer numbers since the announcement; and Monese noted a bump in new customers and a 200% swell in incoming payments from N26 on February 11.

The windfall from N26's retreat is a boon for all UK neobanks, but is particularly well-timed for Starling. Starling is enjoying a burst of momentum right now: In addition to a fresh £60 million ($77.6 million) capital raise from existing investors announced last week, it also added 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 ($161.6 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.

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