Dutch digital bank Bunq has announced it has applied for broker-dealer registration in the United States as part of its strategy to expand its presence across the Atlantic.
According to Bunq CEO Ali Niknam, the application for broker-dealer status marks the beginning of the bank’s journey toward obtaining a full banking license in the U.S. While he did not provide a specific timeline for this process, he expressed enthusiasm regarding the growth opportunities in the American market.
With the broker-dealer license, Bunq will be able to enhance service offerings to its customers, particularly those with international lifestyles—its primary target demographic. “We aim to provide a broad range of our services to users who work and live globally,” Niknam told Finance Newso. Bunq specifically caters to “digital nomads,” who are individuals capable of working remotely from anywhere.
Following the acquisition of broker-dealer authorization, Bunq expects to offer most of its services within the U.S., with the exception of savings accounts, Niknam noted.
Presently, Bunq holds a banking license within the European Union and has applied for an Electronic Money Institution (EMI) license in the U.K. The bank previously operated in the U.K. but exited the market in 2020 due to the implications of Brexit.
Initially, Bunq submitted a request for a U.S. Federal bank charter in April 2023 but withdrew the application a year later, encountering regulatory hurdles between its home country and U.S. authorities. The bank is now preparing to refile for a full U.S. banking license later this year.
65% Increase in Profit
Similar to other fintech companies like N26 and Monzo, Bunq has taken advantage of the high interest rate environment, benefiting from yield gains on customer deposits held at the central bank.
Niknam indicated that, while elevated interest rates have played a positive role, a broader increase in platform usage and a focus on operational cost efficiency have been crucial to the bank’s success. “Due to our lean structure and the way we’ve developed our systems from the ground up, we’ve managed to not only boost our profits but also provide competitive interest rates in the European market, particularly in the Netherlands,” he remarked.
Recently, central banks in the EU, U.K., and U.S. have begun to lower interest rates in response to decreased inflation and emerging economic slowdown concerns, which could impact bank profitability.
However, Niknam has expressed confidence, hinting that expected decreases in interest income will be balanced out by a diversified revenue stream that includes paid subscription services and innovative new features. Bunq has recently introduced a stock trading tool for users.
“Unlike the situation in the U.K., we experienced a period of negative interest rates in continental Europe for an extended time,” Niknam shared. “As we expanded, we had to manage growing costs associated with the deposits held at Bunq. Regardless, I believe we are well-positioned for 2025.”
As Bunq navigates these new opportunities, it faces stiff competition in the U.S. market, which is dominated by established banking giants like JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, in addition to formidable fintech players like Chime and Robinhood.
