Dutch digital bank Bunq is setting its sights on obtaining a banking license from U.K. financial regulators in the near future. CEO and founder Ali Niknam expressed his optimism in an interview at the Viva Tech conference in Paris, stating that he hopes for approval by the end of the year or early next year. This strategic move is seen as a crucial step in Bunq’s expansion plans and reentry into the U.K. market.
Despite initially launching in the U.K. in 2019, Bunq was forced to exit the country in late 2020 due to the implications of Brexit. The passage of Brexit legislation meant that EU-based financial institutions were no longer able to operate in the U.K. market based on their home country authorizations. Currently holding only a banking license with the Dutch central bank, Bunq is now aiming to reenter the U.K. market by securing an electronic money institution license from the Financial Conduct Authority. This would allow Bunq to target the sizable market of British digital nomads, estimated at 2.8 million individuals.
The quest for a U.K. banking license poses significant challenges for Bunq, particularly in a competitive landscape dominated by established players like Revolut. As a British-based fintech company with an existing electronic money institution license, Revolut has been striving to obtain a full banking license in the U.K. for several years. Unlike an e-money license, a banking license would enable Bunq to provide loans, expanding its range of financial services and capabilities. Companies like Monzo and Starling, which already possess bank licenses in the U.K., serve as examples of successful neobanks in the region.
Founded in Amsterdam in 2012 by tech entrepreneur Ali Niknam, Bunq has experienced remarkable growth to become one of Europe’s leading neobanks. With 12.5 million users across Europe and deposits totaling 8 billion euros, Bunq has garnered significant traction in the fintech space. Investors have valued the company at 1.65 billion euros, underscoring its market potential and attractiveness. Moreover, Bunq achieved a milestone in 2023 by reporting its first full year of profitability, with net profits reaching 53.1 million euros.
In addition to its aspirations in the U.K. market, Bunq is also eyeing expansion opportunities in the United States. The company took a proactive step by applying for a U.S. federal bank charter in April 2023, signaling its intent to establish a presence in the American financial landscape. This move aligns with Bunq’s broader strategy of geographic diversification and pursuit of new growth avenues beyond Europe.
Bunq’s endeavor to secure a U.K. banking license reflects its ambition and determination to navigate regulatory complexities and enter new markets. As the digital banking sector continues to evolve and intensify, Bunq’s strategic decisions and operational performance will shape its success trajectory in the competitive landscape of neobanking. The outcome of Bunq’s pursuit of a U.K. banking license remains a pivotal development to monitor as the company seeks to solidify its position as a prominent player in the global fintech ecosystem.
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