PARIS — Bunq, a Dutch digital bank, hopes to obtain a banking license from UK financial regulators later this year or early next year, according to the company’s CEO and founder, Ali Niknam.
“I hope we’ll get somewhere by the end of the year, maybe early next year, because the U.K.’s processes may differ slightly from 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, known for its rainbow-colored cards and focus on so-called “digital nomads” who are not bound by a single country or location, first launched in the United Kingdom in 2019. However, the bank was forced to leave the country in late 2020 due to Brexit.
After Brexit became law, EU-based financial institutions could no longer rely on their own country authorizations to operate in the United Kingdom market. Bunq currently holds only a banking license from the Dutch central bank.
Challenges of reentering the UK market
Bunq is now preparing to re-enter the UK market. Last year, the firm applied to the Financial Conduct Authority for an electronic money institution license. It claims that a U.K. launch would allow it to tap into a “large and underserved” market of approximately 2.8 million British digital nomads.
That will be difficult, though. Revolut, a rival European fintech based in Britain that currently holds an electronic money institution license, has been attempting to obtain a banking license in the United Kingdom for several years.
To be clear, a banking license differs from an e-money license. The main distinction is that a banking license allows businesses to offer loans. Monzo and Starling are two of the few consumer fintech platforms in the United Kingdom with their own bank licenses.
“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 stated to CNBC.
Bunq was founded in 2012 in Amsterdam by Dutch tech entrepreneur Ali Niknam and has since grown to become one of Europe’s largest neobanks, with 12.5 million users and deposits totaling 8 billion euros ($8.6 billion). It was last privately valued by investors at 1.65 billion euros.
Bunq reported its first full year of profitability earlier this year, with a net profit of 53.1 million euros expected in 2023. Bunq is also looking to expand in the United States, having previously applied for a US federal bank charter in April 2023.
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