Dutch digital bank Bunq, known for its rainbow-colored cards and focus on “digital nomads,” is aiming to secure a banking license from U.K. financial regulators later this year or early next year. The firm’s CEO and founder, Ali Niknam, expressed hope during an interview at the Viva Tech conference in Paris, stating that the UK’s regulatory processes may differ from those in Europe, making the timeline uncertain. Niknam remains optimistic about their chances of success, despite the challenges posed by Brexit.
After initially launching in the U.K. in 2019, Bunq was compelled to exit the market in late 2020 due to Brexit. The departure was a consequence of EU-based financial institutions losing the ability to operate in the U.K. without a local authorization post-Brexit. Currently holding a banking license with the Dutch central bank, Bunq aims to re-enter the U.K. market by obtaining an electronic money institution license from the Financial Conduct Authority. This move is driven by the opportunity to cater to approximately 2.8 million British digital nomads, an underserved market.
Bunq faces stiff competition in the U.K. from established players like Revolut, which has been striving for a banking license for years. Unlike an e-money license, a banking license enables firms to offer loans, positioning them to provide a wider range of financial services. Monzo and Starling, prominent U.K. consumer fintech platforms, have already secured their own bank licenses, indicating the challenging landscape Bunq must navigate to achieve its goals. Despite the hurdles, Niknam remains hopeful, highlighting the responsive nature of the U.K. regulator in their ongoing dialogue.
Founded in Amsterdam in 2012 by Ali Niknam, Bunq has evolved into one of Europe’s leading neobanks, boasting 12.5 million users across the continent and deposits amounting to 8 billion euros. With a private valuation of 1.65 billion euros, the bank reported its first full year of profitability in 2023, generating a net profit of 53.1 million euros. Beyond Europe, Bunq is eyeing expansion into the United States, having initiated the process of obtaining a U.S. federal bank charter in April 2023.
Bunq’s pursuit of a U.K. banking license underscores the bank’s ambition to expand its footprint into new markets and cater to diverse customer segments. As the fintech landscape continues to evolve, securing regulatory approvals and navigating competitive landscapes pose challenges that require strategic foresight and perseverance. Through its growth trajectory and financial milestones, Bunq exemplifies the resilience and innovation driving digital banking advancements in the modern era.
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