Bunq Hopes To Secure License For UK Expansion 

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Dutch digital bank Bunq is hoping it will manage to secure a banking license from U.K. financial regulators later this year or early next year.

TakeAway Points:

• Bunq was first introduced in the UK in 2019 and is well-known for its rainbow-colored cards and emphasis on so-called “digital nomads.”
• However, Brexit meant that EU-based banks could no longer utilise their own country licences to operate in the U.K., forcing the Dutch neobank to leave the nation in late 2020.
• At the Viva Tech conference in Paris, Bunq’s founder and CEO, Ali Niknam, told CNBC, “I hope we will get someplace by the end of the year, maybe early next year.”

Bunq seeks to Secure a Banking License

According to CEO and founder Ali Niknam, Bunq, a Dutch digital bank, is expecting to obtain a banking licence from UK financial regulators later this year or early next year.

“I hope we’ll get somewhere by the end of the year, maybe early next year, because the U.K.’s processes may be slightly different to Europe because it’s a different regulatory area,” Niknam said in an interview last week at the Viva Tech conference in Paris.

“I don’t know when they’re going to say yes, but so far, I have little reason to believe that we won’t be successful.”

Bunq was first introduced in the United Kingdom in 2019 and is well-known for its rainbow-colored cards and emphasis on so-called “digital nomads” who are not restricted by any one nation or place. However, Brexit caused the bank to leave the nation in late 2020.

Following the enactment of Brexit, financial institutions based in the EU were no longer able to rely on national authorizations to conduct business in the UK market. Bunq only has a banking licence from the Dutch central bank at this time.

Challenges with Returning into the UK Market

Bunq is currently preparing to reenter the UK market. The company applied for a licence to operate as an electronic money institution with the Financial Conduct Authority last year. It claims that by entering the UK market, it will be able to reach the 2.8 million British digital nomads who make up a “huge and underserved” market.

That will not be easy, though. Rival European fintech Revolut has been attempting for a number of years to obtain its U.K. banking licence. Revolut is headquartered in Britain and presently holds an electronic money institution licence.

A banking licence is undoubtedly distinct from an e-money licence. The main distinction is that businesses are authorised to provide loans by virtue of a banking licence. Among the few consumer fintech platforms in the UK with their own bank licences are Monzo and Starling.

“We’re working as hard as we can, the U.K. regulator has been very responsive, dialogue is ongoing, I don’t know how long it’s going to take, but things seem to be moving,” Niknam said.

About Bunq

Dutch software entrepreneur Ali Niknam founded Bunq in Amsterdam in 2012. Since then, it has expanded to become one of the biggest neobanks in all of Europe, with deposits totaling 8 billion euros ($8.6 billion) and 12.5 million members throughout the continent. Investors last estimated its private value to be 1.65 billion euros.

Bunq said earlier this year that its first full year of profitability had resulted in a net profit of 53.1 million euros in 2023. Additionally, Bunq is looking to grow in the US; in April 2023, it applied for a federal bank charter there.