Fintech startup Bunq is taking the next step in its mission to be one of the few digital banking solutions that offers services to customers in the United States. The Amsterdam-based firm has filed for a US banking license, which could potentially give it the same regulatory and financial protection enjoyed by traditional banks in the country. The firm is hoping that if approved, it can become a viable bank alternative and target the estimated five million digital nomads who conduct banking transactions across continents, especially with the economic slowdown of the pandemic.
The company was founded in 2012 and is headed by CEO Ali Niknam. Initially self-funded by Niknam and the company taking €193 million ($210 million) external funding at a $1.9 billion valuation in 2021, Bunq provides a wide array of banking services such as personal and business accounts, ATM withdrawals, money transfers, as well as multi-currency spending and saving products.
European fintechs have long been pushing to gain a foothold in the US banking industry but few have seen success. Services like Revolut, N26, and Monzo have all attempted to do the same but none have gained a license so far. The complexity of the regulatory process and the cost involved in gaining FDIC approval have proven difficult for many fintech startups. Even companies like Chime, a San Francisco-based fintech startup providing banking services, have had difficulties gaining US banking licenses.
Bunq sees its advantage in being already backed by the Dutch regulator, which it obtained in 2014, becoming the first institution to achieve one in 35 years. These credentials, it is believed, can help the startup gain respect from the American authorities and gain the license it is seeking. Moreover, the company also claimed that it was profitable for the last quarter of 2022, with a pre-tax profit of $2.5 million, and broke even in 2021. Bunq is hoping that these financial benchmarks improve its chances of gaining a US banking license.
It is estimated that the process could take 18 to 24 months to complete. Niknam is confident in the company’s ability to pull it off but is aware of the costs that come with regulation. To ensure its success, he said that it is important to stay focused and cost-efficient by avoiding major marketing campaigns that might be expensive. One thing is certain, Bunq’s potential success in the US could prove to be a massive boon for digital banking services in the country and encourage other fintechs to join in.
