Six months after unveiling plans to reenter the UK market, Amsterdam-based challenger bank bunq insists it is waiting ‘patiently’ for its E-Money Institution (EMI) licence. However, the bank admits it could be next year before it secures the necessary regulatory approval.
bunq initially pulled out of the UK market in 2020 due to the uncertainties and complications caused by Brexit. The withdrawal was a strategic decision, it says, but the UK has always remained a “hugely important market” for the bank, which highlighted the UK’s position at the forefront of European fintech.
Bianca Zwart, chief of staff, bunq
“Before Brexit, we planned to open our second office in London,” says Bianca Zwart, bunq’s chief of staff.
“We’ve always had our sights set on the UK. We see huge potential here – It’s at the forefront of European fintech and a bridge between Europe and the rest of the world.
“With the second-highest number of digital nomads in the world, the UK is a natural fit for us. These digital nomads want to live an international life free from borders, and we can’t wait to be back so we can make their life easy wherever they go.”
EMI application
The Financial Conduct Authority (FCA) issues Electronic Money Institution (EMI) licences in the UK. While EMIs are similar to banks, they are limited to providing payment services and holding client funds without engaging in traditional banking activities like lending.
In January 2024, bunq revealed its application for an EMI licence rather than a full banking licence, a strategic choice that allows the bank to offer essential services tailored to the needs of its UK users.
“Our choice fell on the EMI licence as it allows us to offer all the essential services that would make our UK users’ lives easy,” Zwart explained.
bunq’s return to the UK coincides with profitability milestones among its competitors. Monzo recently announced its 2024 financial results, revealing its first full-year pre-tax profit, while UK digital banking group Starling also recently reported a 54.7 per cent increase in pre-tax profits to £301.1million.
Yet Zwart suggests that bunq’s strategy remains focused on its user-centric approach.
“We’ve always run our own race and built a bank rooted in the wants and needs of our users. We follow our users’ lead, and our expansion is entirely driven by where they go. We’ve reached structural profitability and we use these profits to fuel our global growth. Our approach for the UK is the same as for any other market: creating a product users love. When users are happy, commercial success naturally follows.”
“We always chose to remain independent, and that’s the path we’re sticking to.”
Growth strategy
Expanding into new markets involves a balanced approach of local leadership guided by a global strategy, explains Zwart.
“Whenever we enter a market, we follow a two step approach. We first focus on getting a group of enthusiastic users and truly tailor our product to their needs. Following this, we go all-in. While our central team in Amsterdam drives our global growth strategy, our local team in London ensures a seamless fit tailored to local needs.”
Countdown to launch
The exact timeline for bunq’s UK launch depends on the EMI licence approval but Zwart remains optimistic, stating: “As soon as the licence is granted, we’ll relaunch in the UK and onboard new British users. We can’t wait!”
She hopes that the licence will be granted “somewhere by the end of this year, maybe early next year” but insists the licensing process, though detailed, has been progressing smoothly.
“As anywhere in the world, conversations with the regulator are strictly confidential. Besides, regulators just don’t rush things (in the Netherlands, we were the first in 35 years to get a full European banking licence!).
“It always takes a lot of time, patience, and paperwork. So far, the regulator has been very responsive and a productive dialogue is ongoing. We just need to continue to work hard on our application and allow the regulator to do their job.
“We cannot wait to be back, stay tuned!”
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