Brexit will have many challenges. But blaming “volatility” instead of competition is letting N26 off the hook for simply not being all that compelling compared to it’s competitors.
So far nothing has actually changed, despite the headlines. Transition period etc. If you believe the FT then the big impact so far is a slightly weaker currency which should help a German firm, not hinder them.
It's really not clear where this volatility would be coming from, or what that actually means precisely, or why it'd be an issue now and not when they entered the market, or why they'd find it so hard to get a UK banking license if they did end up needing one. The costs of getting a banking license are high if you're creating a new bank, because there are so many policies and laws to comply with that require infrastructure e.g. AML enforcement.
But if you're already operating the costs of getting a license would pretty minimal. So many of the requirements are about demonstrating you could run a bank in theory, that a process for converting an EU-recognised license to a UK-recognised license would certainly be very streamlined. This is doubly true because the UK has focussed on making it much easier to create new banks in the past 10 years. The banking application process is far easier than it used to be.
The relationship between the UK and mainland Europe is changing dramatically. The UK think they’re going to force things their way by economic might alone, but the social ramifications of all of this will last far longer than you might expect.
And the FSA and Bank of England have a special unit to help, including a special "temporary permission regime" to ensure existing EEA banks will be able to continue operating in the UK while the new licences are sorted out for up to 3 years from the end of the transition period (end of this year), or even later as Treasury can extend it.
That is to say, they could have continued operating in the UK until at least 31st December 2023 with minimal overhead and no actual British bank licence.
This is why there is no panic or rush in the banking sector. Those who are announcing that they are leaving were already contemplating leaving for purely commercial reasons and are simply doing it now to simplify things (that way they don't need to look into the new regime or temporary regime at all).