Bunq Seeks UK Banking License for Reentry

Dutch digital bank Bunq is working to secure a banking license from UK financial regulators, aiming for approval by late 2023 or early 2024, CEO and founder Ali Niknam told CNBC. The bank’s efforts follow its forced exit from the UK in 2020 due to Brexit.

Niknam expressed optimism about the application process, stating, “I hope we’ll get somewhere by the end of the year, maybe early next year, because the UK’s processes may be slightly different to Europe because it’s a different regulatory area.”

Bunq, known for its rainbow-coloured cards and targeting “digital nomads,” initially launched in the UK in 2019. However, Brexit ended the bank’s UK operations as EU-based financial institutions could no longer rely on their home country authorisations. Currently, Bunq holds a banking license with the Dutch Central Bank.

Bunq aims to reenter the UK market and has submitted an application for an electronic money institution (EMI) license to the Financial Conduct Authority. This move targets the estimated 2.8 million British digital nomads, a market Bunq sees as large and underserved. Obtaining a full banking license, which permits offering loans, remains challenging, as seen with rival Revolut’s ongoing attempts to secure its own UK banking license.

Niknam remains hopeful, noting, “We’re working as hard as we can, the UK regulator has been very responsive, dialogue is ongoing. I don’t know how long it’s going to take, but things seem to be moving.”

Founded in 2012 in Amsterdam by Dutch tech entrepreneur Ali Niknam, Bunq has grown to become one of Europe’s largest neobanks, with 12.5 million users and €8 billion ($8.6 billion) in deposits. The bank was last valued at €1.65 billion. In 2023, Bunq reported its first full year of profitability, with a net profit of €53.1 million. The bank is also seeking expansion in the United States, having applied for a US federal bank charter in April 2023.