Bunq, the Dutch digital bank known for its rainbow-colored cards and focus on “digital nomads,” is in the process of obtaining a banking license from U.K. financial regulators. CEO and founder Ali Niknam expressed his hopes of securing the license by the end of the year or early next year, as the U.K.’s regulatory processes differ from those in Europe. Although Bunq initially launched in the U.K. in 2019, the bank had to leave the country in late 2020 due to Brexit regulations.
With the passage of Brexit, EU-based financial institutions like Bunq were no longer able to operate in the U.K. market using their own country authorizations, leading to their exit from the country. Currently, Bunq holds a banking license with the Dutch central bank and is now seeking to reenter the U.K. market. Despite submitting an application for an electronic money institution license with the Financial Conduct Authority, Bunq faces tough competition from established players like Revolut, who have been struggling to secure a banking license in the U.K.
Founded in 2012 in Amsterdam by Ali Niknam, Bunq has grown to become one of the largest neobanks in Europe, boasting 12.5 million users across the continent and deposits of 8 billion euros. With a valuation of 1.65 billion euros, Bunq reported its first full year of profitability earlier this year, with a net profit of 53.1 million euros in 2023. The digital bank is also eyeing expansion in the United States, having applied for a U.S. federal bank charter in April 2023.
Obtaining a banking license in the U.K. is crucial for Bunq’s growth, as it would enable the bank to offer loans to its customers. While progress has been made with the U.K. regulator showing responsiveness and ongoing dialogue, the timeline for securing the license remains uncertain. With the potential to tap into a market of 2.8 million British digital nomads, Bunq is eager to establish a presence in the U.K. to cater to this underserved segment.
Bunq’s journey to secure a banking license in the U.K. reflects the challenges and opportunities faced by fintech companies looking to expand internationally. As the digital banking sector continues to evolve, regulatory compliance and market entry strategies will be key factors in determining the success of companies like Bunq in new markets.