Dutch digital bank Bunq is facing challenges in securing a banking license from U.K. financial regulators. The CEO and founder, Ali Niknam, expressed hope that they will be successful in obtaining the license by the end of this year or early next year. The process may be more complex due to the differences in regulatory requirements between the U.K. and Europe. The company had to exit the U.K. market in late 2020 as a result of Brexit, which posed obstacles for EU-based financial institutions operating in the country.
Bunq, known for its unique rainbow-colored cards and focus on digital nomads, is planning to reenter the U.K. market. The firm submitted an application with the Financial Conduct Authority for an electronic money institution license, aiming to tap into the underserved market of British digital nomads. However, obtaining a banking license is a challenging task, as demonstrated by Revolut’s struggle to secure its own U.K. banking license despite holding an e-money institution license.
Despite the challenges, Bunq has experienced significant growth since its founding in 2012 by Ali Niknam. The company has become one of Europe’s largest neobanks, with 12.5 million users and deposits totaling 8 billion euros. Its profitability has also improved, with a net profit of 53.1 million euros in 2023. Investors have valued Bunq at 1.65 billion euros, reflecting its success and potential for expansion.
In addition to its plans for the U.K. market, Bunq is also seeking to expand its operations in the United States. The company filed for a U.S. federal bank charter in April 2023, indicating its ambition to enter the American market. This move aligns with Bunq’s strategy to grow its presence internationally and reach a broader customer base.
Overall, Bunq’s journey to secure a U.K. banking license reflects the challenges and opportunities faced by fintech companies in navigating complex regulatory environments. Despite the hurdles, the company’s focus on innovation and serving niche markets like digital nomads has positioned it for continued success and growth in the competitive financial technology industry.