Neobank Ruuky files for insolvency

Neobank Ruuky files for insolvency

A bank based in Germany is going under in the wake of the economic crisis. What will happen to the customers now?

Neobank Ruuky has been greeting customers on its site since last week with a sad lead: “Unfortunately, Ruuky had to file for insolvency proceedings and we are currently working on a future for your bank.”

The young customers of the Hamburg bank, who are on average 16 years old, are shocked. On the social media channels, they write: “I can’t reach you by e-mail!” and “I fluxed once the money.”

Is the money they have saved at risk? What Ruuky’s insolvency application actually means for customers:

Credit balances not affected
Ruuky promises: “The dispositions of the accounts and credit balances are not affected.” Meaning: balances should not be gone, payments and transfers should still be possible, and cash cards should work. Payments should also be possible.

What won’t work: no new accounts can be opened, and real-time top-ups and the app’s pocket money assistant can no longer be offered.

What led to the insolvency? Ruuky founder Jes Hennig told Finance Forward, “We failed to raise new capital in the current market environment.” One of the main reasons, he said, was the current uncertainty in the global economy. Ruuky said, “At this time, lenders are very cautious about making further investments.”

Currently, the next steps for the future of Ruuky GmbH are reportedly being determined together with an insolvency administrator in Hamburg. “Insolvency is a difficult step for us, but it also holds an opportunity. We continue to work on Ruuky and our vision,” Ruuky writes combatively.

What actually is a neobank?
So-called neobanks like Ruuky are credit institutions that specialize in the connection between mobile app and associated cash card. At Ruuky Bank, which was initially called Pockid, young adults under the age of 18 in particular were to be given the opportunity to safely make their own first financial decisions.

They could manage their own money or create savings plans. Ruuky was founded three years ago and has around 250,000 customers. Ruuky currently employs around 20 people.