In 2017 Starling launched its mobile-only consumer current account, offering a range of features traditional banks can only dream of. It followed this up in September 2017 with an online marketplace that connects to a range of financial services apps, including PensionBee, a pension provider, and Wealthify, an online investment manager. In March 2018 it launched a business current account.
Starling accounts can be set up in minutes and offer real-time notifications, sending an alert when money goes in or out of the user’s account. In addition to traditional banking functions, such as the ability to set up direct debits, standing orders and payments, Starling offers a spending insights feature, which itemises spending by category and by merchant. There are also multiple payment methods, via Apple Pay, Google Pay and Fitbit Pay, and customers earn interest on positive balances up to £85,000 and can also make international payments.
Users can lock lost debit cards with one tap, while Starling’s Settle-Up feature allows them to split bills easily with friends and family. Starling’s London-based customer services team is available 24/7 and users can also give feedback through an active online community.
Starling was the first to develop a mobile-only proposition for the Current Account Switch Service, allowing new users to switch between banks in a simple, reliable and stress-free way. It was also the first to offer Faster Payments with real-time notifications.
How has Starling achieved all this? By starting from scratch. While the big banks are spending billions on their digital transformations, Starling has built a fully functioning retail bank on its proprietary technology in less than 18 months for less than £20 million. Because it began with a blank sheet, with no outmoded legacy IT systems in place, it is able to deliver more with certainty at a lower cost and in less time.
Mobile banking isn’t just the future – it’s happening right now
Key to the Starling approach is the belief that having an IT department is a broken model. After a 30-year career in traditional banking, in which she pioneered the UK’s first same-day payment service, Anne Boden, Starling’s chief executive, was very clear from the outset that it’s more productive to have all the people with different skillsets, who are going to be involved with a project, working together from end to end.
The idea is to ensure that the people responsible for implementing any new feature are involved with the design and build team from the start, so they know all that the technology is capable of or what to do if bits of it don’t work properly. Any one team remains together only as long as needed.
Like traditional financial institutions, Starling generates revenue by accepting deposits and lending, and from interchange fees on debit cards. But, with no branches and no legacy IT systems to patch up, its cost basis is very different compared with traditional banks and it only uses cloud hosting. It also has payments services and charges other parties, including fintech companies and other challengers, to use its access to the payment schemes. In addition, the Starling Marketplace generates affiliate revenues and referral fees.
With the most comprehensive offer of any digital bank, Starling is living proof that mobile banking isn’t just the future – it’s happening right now.