Bunq, the $1.8 billion European neobank, hopes to secure license for UK expansion this year

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Dutch neobank Bunq, which gained popularity for its vibrant rainbow-colored cards and focus on digital nomads, initially entered the U.K. market in 2019. However, due to Brexit, EU-based banks were no longer allowed to use their own country licenses to operate in the U.K., forcing Bunq to exit the country in late 2020.

Speaking at the Viva Tech conference in Paris, Bunq’s CEO and founder, Ali Niknam, expressed optimism about obtaining a banking license from U.K. financial regulators later this year or early next year. Niknam acknowledged that the regulatory processes in the U.K. might differ from those in Europe, but he remained hopeful about the outcome.
Bunq, a bank known for its unique rainbow-colored cards and its focus on “digital nomads” who are not tied to a specific country or location, initially entered the U.K. market in 2019. However, due to Brexit, the bank had to withdraw from the country in late 2020.

With the implementation of Brexit, EU-based financial institutions were no longer able to rely on their own country’s authorizations to operate in the U.K. market. Currently, Bunq only holds a banking license from the Dutch central bank.

Despite the challenges, Bunq is now making plans to reenter the U.K. market. The company has submitted an application for an electronic money institution license with the Financial Conduct Authority. By launching in the U.K., Bunq aims to tap into the large and underserved market of approximately 2.8 million British digital nomads.
However, it will be a challenging task. Revolut, a rival European fintech company based in Britain, has been attempting to obtain a banking license in the UK for several years. Currently, Revolut holds an electronic money institution license.

It is important to note that a banking license differs from an e-money license. A banking license allows firms to provide loans, whereas an e-money license does not. Monzo and Starling are among the few consumer fintech platforms in the UK that possess their own banking licenses.

Ali Niknam, the Dutch tech entrepreneur who founded Bunq in Amsterdam in 2012, expressed optimism about securing a banking license in the UK. He mentioned that Bunq is working diligently and that the UK regulator has been cooperative. Although the timeframe for obtaining the license is uncertain, progress is being made, according to Niknam’s statements to CNBC.

Since its establishment, Bunq has experienced significant growth and is now one of Europe’s largest neobanks. It boasts 12.5 million users across Europe and deposits totaling 8 billion euros ($8.6 billion). The company was last valued privately by investors at 1.65 billion euros.
In the beginning of the year, Bunq announced its first annual profit, achieving a net profit of 53.1 million euros in 2023. Additionally, Bunq is actively seeking growth opportunities in the United States, as demonstrated by its application for a U.S. federal bank charter in April 2023.