Dutch digital bank Bunq is planning to return to the UK to tap into a “large and underserved” market of around 2.8 million UK “digital nomads”.
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PARIS — Dutch digital bank Bunq hopes to be able to obtain a banking license from UK financial regulators late this year or early next year, the firm’s CEO and founder Ali Niknam told CNBC.
“I hope we’ll get something done by the end of the year, maybe early next year, because the process in the UK may be a little different to Europe because it’s a different area of regulation,” Niknam said in an interview last week on Viva Tech conference. in Paris.
“I don’t know when they’ll say yes, but for now I have little reason to believe we won’t be successful.”
Bunq, known for its rainbow maps and targeting so-called “digital nomads” who are not tied to any one country or location, originally launched in the UK in 2019. But at the end of 2020 the bank was forced to leave the country because of Brexit.
The passage of Brexit into law meant that EU financial institutions could not rely on their home country’s permissions to operate in the UK market. Currently, Bunq only has a banking license from the Dutch central bank.
Challenges of returning to the UK market
Now Bunq plans to return to the UK market. Last year the firm applied to the Financial Conduct Authority for an electronic money institution licence. It says the UK launch will allow it to tap into a “large and underserved” market of around 2.8 million UK digital nomads.
However, this will prove difficult. Rival European fintech company Revolut, which is based in the UK and currently holds an electronic money institution licence, has been trying to obtain its UK banking license for several years.
Of course, a banking license is different from an electronic money license. The key difference is that a banking license gives firms permission to offer loans. Monzo and Starling are among the few UK consumer fintech platforms to hold their own banking licenses.
“We’re working as hard as we can, the UK regulator is very responsive, the dialogue is ongoing, I don’t know how long it will take, but it looks like things are moving forward,” Nicknam told CNBC.
Founded in 2012 in Amsterdam by Dutch tech entrepreneur Ali Niknam, Bunq has since grown into one of Europe’s largest neobanks, with 12.5 million users across Europe and €8 billion ($8.6 billion) in deposits. Investors last valued it privately at 1.65 billion euros.
Earlier this year, Bunq reported its first full year of profitability, posting a net profit of €53.1 million in 2023. Bunq is also looking to expand in the United States, having previously applied for a US federal bank charter in April 2023.