“We keep our business model flexible”: Interview with bunq’s founder Ali

It’s no secret that challenger banks are storming the fintech world with user-friendly apps, online ‘spaces’ to organise savings and fast account transfers. But did you ever hear of an online bank planting trees?

bunq was founded in 2012 by Ali Niknam, who set out to radically change the traditional banking industry, and was the first to get a European banking permit in over 35 years. Since then the bank has grown to be available in 30 European markets (from Ireland to Latvia) and become one of the only challenger banks to create a sustainability-focused product like the Green Card, a metal card that plants a tree for every €100 spent. As a result, by January 2020 bunq users had offset a global reduction of CO2 emissions by 12.3 million kg, which translates into over 13,000 flights from Paris to New York.

So what’s next for bunq? Read on to find out what founder and CEO Ali predicts for online banking after coronavirus, how bunq supports founders and his advice for fintech startups looking to expand abroad.

Thank you for joining us Ali! Can you explain why bunq is called the ‘bank of The Free’?

Easy. We are a bank by the people, for the people. To put some meaning behind that, bunq isn’t your typical challenger bank: rather than improve existing financial products, we introduce fundamentally different products dedicated to our users’ wants and needs. Rather than building our business around making money with deposits, we are the only bank in the world that lets our users decide what happens with their money. 

How did you start bunq, and what made you decide to go for it as a full-time project?

During the financial crisis of 2008, it became apparent that the current system wasn’t stable. As the economy crumbled due to bad loans, I felt it was my social duty to create a bank that would make life easy, as well as value transparency and innovation.

I was into tech at a young age and knew banks with technology and innovation at their core were missing from the financial market. Knowing it was time to take a stance on that and bring a product people would love to the market, I invested €44.9 million of my own money into bunq. It remains the only licensed European challenger bank that is completely self-funded. 

What cool offers does bunq have for young, innovative startup founders?

As a founder myself, I know that keeping track of finances in a simple, transparent way is essential. 

Bunq business is designed with this mind. Entrepreneurs and startups can enjoy features that save them valuable time via the app. This cuts out the need to deal with paperwork, branch visits or bureaucracy every again and allows startups to focus on what’s truly important: their business. 

Do you have any predictions for the next online banking trends, in the next 5-10 years?

I think in the next 5-10 years we will see a continued move towards digitalisation in the banking sector –  bank branches will be few and far between as will the use of cash. We are already seeing consumers demand more control over their money and its impact. However, this movement is only in its infancy right now. bunq grants users freedom of choice in banking, soon other banks will follow suit. 

We included bunq in our list of 10 Amsterdam-based startups to watch in 2020. But you’re not just based out of Amsterdam, you’ve since expanding to all EU countries! Could you talk us through your 2-step process? 

bunq is currently available in 30 European markets.

bunq’s two step process recognises that every country embraces its own culture and habits –  there’s no one-size fits all when it comes to finances. Every time we launch in a new destination, we start by trialling bunq whilst mingling with those using it and utilising their feedback to adjust our service to fit in with exactly what they want. 

We make sure bunq is a cultural fit before throwing it like a blanket across different countries. Only then, once we are confident in the product do we push it out through marketing and advertising. 

What 3 pieces of advice would you give to fintech founders hoping to expand abroad?

Three pieces of advice that I would give to fintech founders looking to expand abroad would be: 

  • Do the research. Make sure you know the market and your user base. Each region will have different cultural quirks, and knowing these are key to understanding how your product can ease common pain points. 
  • Ask yourself – does this new market align with your company vision? It is very exciting when you have the opportunity to take your company global. However, after the initial research stage it is important to stay level headed and ask yourself if you will still be able to move forward with the company’s vision and maintain its values? Don’t get  carried away and find yourself surrounded by unwanted compromises and roadblocks further down the line. Global shouldn’t mean a loss of values. 
  • Look at your access to qualified talent. Taking a company global is no mean feat and it requires a team of the right people. It is crucial that a founder ensures they have access to the talent needed to successfully expand their business. 

Many people are suddenly working remotely and isolating at home, due to the current pandemic. As an online bank, users have many benefits right now for banking with you. Have you seen an uptake in users, have you adapted your services, and what do you expect for the coming months?

Our users and their safety are of top priority to us at the moment. We have adapted our services to reflect the current global crisis such as increasing our contactless limit to €100 and provided our users with information on how they can reduce the spread of germs as they bank. 

As we are an online bank we already ensure that our users have access to everything they need directly from their mobile app. For the coming months we will continue to monitor and ask for feedback from our users on what else bunq can be doing to support them during this time and adapt to these needs.

How do you think the fintech industry (and its startups) can respond, collaborate or evolve to survive?

This time is challenging for many businesses, but the fintech industry is in a position to come out of the other side stronger than before – especially, as countries rush to digitalise and move towards cashless structures. While more traditional banks are conformed to certain guidelines and regulations, fintech companies have the freedom and the flexibility to diversify and roll out new offerings rapidly. 

In the meantime, a key element to weathering this storm is diversity – to create urgently needed resilience, diversity is key.

We read about your sustainability initiatives, like tree planting. What made you decide to take this environmental impact route, and what do you have in the pipeline?

We wanted to make green easy and now. At bunq one of our principles is to be better – to create initiatives that work towards being better for us and our users and improving the world. That is what ultimately made our decision to take on the environmental impact and now our users can help to create a greener world with zero effort as they bank.

Planting trees is one of the easiest ways to positively affect the environment. A tree produces clean air, reduces carbon, and provides shelter to wildlife. The trees planted by bunq in partnership with Eden Reforestation are the most cost-effective trees in the world according to The New York Times. They capture 308kg CO2 over their 25 average lifespan and combined with bunq’s unique green subscriptions, have such a green impact that it takes less than two years to start offsetting users’ yearly carbon footprint and allowing them to be fully carbon free.

Furthermore, having listened to user feedback on the initiative, we recently launched our SuperGreen subscription where users are able to plant a tree for every €100 spent across any bunq card.

As we move forward, we keep our business model flexible – always readily malleable in order to adjust to what our users want and need from banking. On the horizon are exciting plans to extend our efforts to reduce Co2 emissions and our carbon footprint – watch this space! 

What has been your biggest challenge and subsequent learning from growing bunq?

Understanding each market individually has been a challenge – but an exciting one. With every new location the challenges vary, often closely linked with habits and customs we couldn’t foresee – that’s why we do the two phase launch. A challenge we still face is uncertainty when it comes to straying away from the traditional, though this, as with other industries, is changing fast, especially as we put our customers wants and needs first.