Dutch digital bank Bunq is planning to re-enter the UK to tap a “large and underserved” market of around 2.8 million British “digital nomads”.
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PARIS – Dutch digital bank Bunq hopes it will manage to obtain a banking license from British financial regulators later this year or early next year, the company’s CEO and founder Ali Niknam told CNBC.
“I’m hoping we’ll get somewhere by the end of the year, maybe early next year, because the processes in the UK may be a little bit different to those in Europe because it’s a different regulatory area,” Niknam said in an interview at the last week Viva Tech conference in Paris.
“I don’t know when they’ll say yes, but so far I have little reason to believe we won’t be successful.”
Bunq, known for its rainbow-colored maps and its focus on so-called “digital nomads” who are not tied to one country or location, originally launched in the UK in 2019. But the bank had to leave the country at the end of 2020 because of Brexit.
The passage of Brexit into law meant that EU-based financial institutions could not rely on their own country’s approvals to operate in the UK market. Currently, Bunq only has a banking license from the Dutch Central Bank.
Challenges of re-entering the UK market
Now Bunq is planning to re-enter the UK market. The company submitted an application to the Financial Conduct Authority for an electronic money institution license last year. A UK launch would allow the company to tap into a “large and underserved” market of around 2.8 million British digital nomads, it said.
However, this will prove difficult. Rival European fintech company Revolut, which is based in the UK and currently holds an electronic money institution license, has been trying to secure its UK banking license for several years.
Of course, a banking license is different from an e-money license. The key difference is that a banking license gives companies permission to offer loans. Monzo and Starling are among the few UK consumer fintech platforms to have their own banking license.
“We are working as hard as we can, the UK regulator has responded very quickly, the dialogue is ongoing, I don’t know how long it will take but things seem to be moving,” Niknam told CNBC.
Bunq was founded in Amsterdam in 2012 by Dutch tech entrepreneur Ali Niknam and has since grown into one of Europe’s largest neobanks overall, with 12.5 million users across Europe and deposits of 8 billion euros ($8.6 billion). It was most recently privately valued by investors at 1.65 billion euros.
Earlier this year, Bunq reported its first full year of profitability, generating a net profit of €53.1 million in 2023. Bunq is also seeking expansion in the United States, having previously applied for a U.S. federal banking charter in April 2023.
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2024-06-03 05:05:56
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