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Thursday, December 07, 2023

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EXCLUSIVE: Starling Bank Plans for the Future of Finance

Starling Bank, the first of the inaugural class of challenger banks to become profitable. It has since embarked upon a compelling and unique journey within the world of finance.

The challenger bank has been a trailblazer within the finance industry, taking the fight to the incumbent banks of days gone by, after achieving a hard-won investment round that raised £48 million. Starling announced itself onto the scene as a serious player. From this, they went on to achieve their required expansion permissions in November 2017 but didn’t have much time to celebrate as, soon after, they took home the B2B Innovation of the Year at the Payments Awards 2018. One cannot help but wonder, what is next?

Anne Boden, CEO and Founder of Starling Bank, raised her concerns regarding the impact – or lack thereof – of the Online Safety Bill. Currently, large social media companies are earning revenue from ads placed by scammers, with these scammers tricking individuals into giving away their hard earned savings and Boden is calling for the bill to force social media companies to take some responsibility for this in order to protect customers. Boden admitted that regarding fraud ‘the banking industry on its own cannot solve this issue, it has to be social media companies, government, law enforcement, telecoms’. The UK stands at a very unique point at the forefront of faster payments, yet, whilst exciting for the well intentioned, as Boden rightfully points out ‘it is also fast for the criminals’.

Yet, as Boden quite rousingly reminds us ‘it is so easy to be defeatist about these things, it’s so easy to say this is a big problem we can’t do anything about it, yes we can!… just because it is difficult to solve, doesn’t mean we don’t try’. Whilst acknowledging that even though Starling is on an upwards trajectory, they do not yet hold the same influence as HSBC’s, Barclays’. It is fair to say that from this, I believe that Fraud and customer care remains at the forefront of Starling Bank’s future as they lead the charge in protecting consumers from scammers and fraudsters.

Following an extended – and somewhat unexpected – period of low interest rates comes a Bank Of England meeting to discuss the possibility of a raised rate and the impact felt by consumers. However, whilst we are assured Starling will be keeping a keen eye on both discussions, Boden is also reassuring customers that ‘most of Starling’s lending occurs at a fixed rate, so the majority of lending will not be impacted by raised rates’.

This notion of Starling’s users’ protection being at the forefront of their concerns is a theme which seems to transcend all decisions made at the challenger bank. This comes as they begin to test the waters in Irish markets after applying for their Irish banking licence pre-covid. Boden promises that whilst a solid date cannot be given, we can be expecting something within the next year.

Whilst Boden may have remained tight-lipped on Starling’s plans for a future IPO, the future of Starling Bank remains exciting. In an aspect of life such as finance, we as consumers can often be left to feel used and confused and this habit of scepticism can be hard to forget. However, when we see the head of a bank such as Starling bank stating that they are ‘not trying to monetise [their] customer base’ and recognizing that these they are creating ‘real accounts used for real spending’ with customers ‘using [our] accounts at Tesco’ one can’t help but feel somewhat more at ease. Anne Boden’s determination to battle against fraud, prioritise customer protection at all costs and expand when it is right, not when it is possible, are three traits that illuminate the bright future at Starling Bank.

To summate the future of Starling, I shall leave the final words to Boden; ‘we are not going to chase initiatives because we think there is an opportunity to increase revenue there. Starling is profitable. We don’t have to keep looking to find where we can go to be profitable’.

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