PARIS — Dutch digital bank Bunq hopes to receive a banking license from British financial regulators later this year or early next year, the bank’s CEO and founder Ali Niknam told CNBC.
“We are hopeful that we will have something by the end of the year, probably early next year, because the UK process may be a little bit different than in Europe because it’s a different regulatory area,” Niknam said in an interview last week at the Viva Tech conference in Paris.
“We don’t know when they’ll say yes, but right now there’s little reason to think we won’t be successful.”
Bunq, known for its rainbow cards and focus on so-called “digital nomads” who aren’t tied to a particular country or location, first launched in the UK in 2019. However, the bank was forced to withdraw from the UK in late 2020 due to Brexit.
With the passage of Brexit legislation, EU-based financial institutions can no longer rely on their home country’s licenses to operate in the UK market. Currently, Bunq only holds a banking license from the Dutch Central Bank.
The challenges of re-entering the UK market
Now, the bank is planning to re-enter the UK market. It applied for an electronic money institution license with the Financial Conduct Authority last year. The company says that launching in the UK will allow it to tap into a “large but underserved” market of around 2.8 million UK digital nomads.
But that will be difficult: Rival European fintech Revolut is based in the UK and currently holds an electronic money institution license, but has been trying for several years to obtain a UK banking license.
To be sure, a banking license is different to an e-money license. The main difference is that a banking license gives a business permission to offer loans. Monzo and Starling are among the few UK consumer fintech platforms that hold their own banking licenses.
“We’re doing everything we can. The UK regulators have been very responsive and the dialogue is ongoing. I don’t know how long it will take, but things appear to be moving,” Niknam told CNBC.
Founded in Amsterdam in 2012 by Dutch tech entrepreneur Ali Niknam, the bank has since grown to become one of Europe’s largest neobanks, with 12.5 million users and 8 billion euros ($8.6 billion) in deposits across the continent. Investors last valued the company at 1.65 billion euros in private transactions.
Earlier this year, Bunq reported its first full-year profit, with a net profit of €53.1 million in 2023. Bunq is also expanding in the United States, applying for a U.S. federal banking charter in April 2023.