The woes of cross-border banking

In October 2017 I reverse Brexited. After nearly 8 years in London, I packed it all in and moved to Berlin. Berlin is one incredible city with plenty of space, great cafes and bars, and a vibrant startup scene. However, as a German city I was well aware of the daunting German bureaucracy (spoiler alert: it hasn’t actually been too bad!)

In addition to applying for a tax number, registering my address, setting up as a freelancer, I had to open up a bank account. The inner fintech nerd got the best of me, and I was very excited to open up accounts from exciting challenger banks I have been watching over the past years, including N26, Holvi and Kontist.

Moving to Germany also meant closing my UK Business Bank account and downgrading my current account. In this article/rant I will discuss my experiences and bring to life the pain of dealing with banks when moving to a new country.

Let’s start with the German SME banking experience.

My first port of call for a bank account was N26 (I opted for the Business account). I completed the first part of the application via the web page and then was prompted to download the app to begin the ID process via ID Now. All good so far. When I commenced the process I was informed that the queue to speak to an ID Now Identity Expert would be approximately 30 minutes (boo). However, I was given the option to receive an alert when the queue is low (yay). When I received this alert, the queue was still at about 15 min (boo again). I played this cat and mouse game with ID Now for about 2 days. Then magically I got through, but the Identity Expert never appeared (the video frame just kept loading) and I kept getting kicked back to the commencement page. This went on for about a week.

Next up was Kontist, a business account targeted to freelancers, and as such, much richer in terms of features than N26 Business. Similar to Coconut in the UK, they offer a real-time tax and VAT tracker and nicely integrate with Debitoor (an accountancy package, in my opinion, is better than Xero).

Kontist, which is powered by Solaris Bank, also uses ID Now. Unfortunately, I had the same issue when trying to go through the ID process with Kontist and kept getting kicked back to the commencement page. I just could not get through to ID Now! The good thing with both banks is that they offer an alternative ID procedure via Post Ident. Basically, you print out a document that has a personal reference number and bring it to the German Post Office. There they check your passport, take a look at you and sign the document and mail this back to the bank (German law requires physical identification hence why taking pictures of your passport of selfies doesn’t cut it like in the UK). I did this first for N26 then for Kontist (mind you I had to wait a combined 45 minutes in the queue at the Post).

I waited a week, emailing both N26 and Kontist to see if the Post Ident had been received and it had not. I’m frustrated now. I explained the situation to N26 via a live chat where they said “try ID Now ” and I explained (again) I could not get through. The agent then suggested that I turn off the Wi-fi when trying to get through to ID Now and use my mobile phone data. Low and behold after taking their advice within 5 minutes I was speaking to an Identity Expert from ID Now (why didn’t either bank put this as a note in the app?!?!). The ID Identity experts weren’t the friendliest of folks, but that day I was able to fully open up my N26 and Kontist account.

One little issue though — when I first applied for my N26 account I entered the wrong apartment number (doh). I immediately changed this in the app and spoke to an N26 agent via live chat and they assured me it would be okay and that the MasterCard would be sent to the updated address. After 10 days I had not received the card so back to N26 live chat where I told them I had not received my card. They told me I had to wait for the card to be sent back to N26 before they could re-issue to the correct address. This was almost three weeks ago and I still do not have a N26 MasterCard. However, I was able to order a N26 Maestro card from the app (although I first thought I had to deposit €100).

I was told by a friend that I cannot use the Maestro to withdraw cash, and can only use this at merchants (lots of merchants only take cash in Berlin) and right now I am too fed up to go back to the N26 live chat.

My Kontist card came quickly with one of the best welcome packs I have received.

Upon first time login they bring the customer through a fantastic journey to ensure they are utilising the slick features around VAT and taxation. Also, while the card costs €29 per year, the fee is refunded if they spend €3000 annually (nice!) I am now actively using this account and it has been an absolute breeze.

So a fairly happy ending in Germany. I now have two German bank accounts, which I was able to obtain without a credit check and without a tax or ID number.

Now, let’s discuss my experience with the UK banks.

I wanted to downgrade my current account with Nationwide. I was paying £13 a month for the FlexPlus account which gave me some basic phone and travel insurance which I used once in about 4 years. I sent Nationwide a message via desktop banking and was told I need to call. So I called and was told that when I downgrade I will receive a new card. I told them I moved to Berlin and I need to change my address. Should have been easy to do that and downgrade the account all in one call, no? Well no it wasn’t.

I had to get put through to a new department which had to manually change my address (telling the poor lady my German address took 10 minutes because she just couldn’t get it), and that it would take 3–4 days to process. I should then call back in 3–4 days to check and THEN I can downgrade the account. Four days pass, I call Nationwide and it still isn’t done. I call back two days later and it’s done, and commence the downgrade procedure after about 15 min of holding. The agent had to then inform me of every other Nationwide current account available, ensure I was making the right decision, questioned if I definitely wanted the account I chose and took about 45 min of my time in the process. Then, at the end, she told me the address didn’t actually change! She then had to take 15 min to speak to somebody to make sure this happened. Ugh!

I received my new Nationwide card in the post, which is not working for a reason I can’t understand. When I tried to call to find out what was happening the queue was about 20 min. I can’t be bothered to call back for now. The nail in the coffin is that I just checked my Nationwide account and they are still charging me the monthly £13 FlexAccount fee.

Simultaneously I am tried to close down my Santander Business account. I sent Santander a message via desktop banking instructing them to close the account and they said sure, send us the account details you want to close. I did, they then said somebody will be in touch. Meanwhile, they put a block on my account so that I couldn’t send the balance to a different account. Not cool for an SME account, especially where expenses have to be paid.

I called Santander, they took the block off then said somebody will be in touch to close the account. Nobody got in touch. I sent another message via desktop banking asking them to close the account. They asked me for the account details. I am reluctant to give them for fear or what may happen next (I think it is unlikely they will actually close the account!)

Over the past 3 odd months I have spent quite a bit of time opening up, closing and downgrading bank accounts from traditional and challenger banks. While the challengers certainly have an edge, there are still pain points in their customer facing journeys. I believe these are associated with scaleability and a lack of suppliers to support the moving parts for a lean bank. (ID Now is used by a host of banks in Germany and I am not the only person to experience long queue times).

I see a future for a truly cross-border banking solution that helps with transient people or those who need to relocate. One Berlin start-up is aiming to plug that gap and I am delighted to be a product advisor to them. It’s always fun when your “work” involves fixing a problem you are all too familiar with!

If you are interested in hearing more about my experience or checking out the features of these banks, drop me an email at digitalmagss@gmail.com