Starling Bank: Money-making In Digital Banking
Starling Bank: Money-making In Digital Banking
Starling Bank has certainly made an impact in the world of digital banks, walking on the path of profitability globally amongst other disruptors, by prioritizing on gaining customers’ trust and loyalty through a customer-centric approach rather than acquisition, in this competitive market. It is important for the digital banking world to know about this important player.
It was founded in 2014 in the UK by Anne Boden, a veteran banker, with the sole vision to create a better bank for everyone.
Starling Bank received its UK banking licence with FCA protection for its customers in 2017, achieving unicorn status in 2021.
The Bank has an account to suit everyone, serving both personal and business services, as well as offering its very own financial services marketplace and Banking-as-a-Service. For kids, there is also the Starling Kite card, cleverly linked to a parent’s account.
Originally built on a mobile app, only later becoming available to desktop, the Starling customer receives instant notifications, insights on their spending, can easily lock or freeze a card, access digital bank statements and create mobile check deposits. The Marketplace also offers them the ability to integrate other services to further enhance their banking experience. Zero-fee overseas spending, great exchange rates and 24/7 customer support are just a few of the Starling perks.
Starling’s unique strategy is key to its happy customers and continued growth.
By teaming up with the UK Government-backed SME lending scheme, and inclusion of Mortgage lending, Starling has increased its customer base to 3+ million in June 2022, increased its workforce, and even had its first taste of profitability back in October 2020. In the 12 months between March 2021 and March 2022, Starling has improved its revenue by 93%, and has swung to a pre-tax profit of £32.1 million from a pre-tax loss of £31.3 million.
The Bank currently holds about 8% of the SME market share and continues to support SMEs through the Recovery Loan Scheme (RLS).
Our report finds that Starling Bank promotes the benefits of slow and steady growth to other Neo-banks.
Its customer-centric approach boosts not only the confidence in existing investors, but also helps to attract new ones. The Bank continued to raise funds despite the Covid-19 pandemic and more than doubled its post-Series D valuation to £2.5B.
Starling’s plans to globalize its BaaS services will kick start in the first half of 2023 as it expands to Europe under ‘Starling International’. Maintaining a special focus on the development of its lending services as well as its M&A strategy will further strengthen Starling Bank’s eco-system and market position, making it well-positioned to reach profitability over the coming year.
Starling has given a good indication of its financial standing for 2022 through the release of its most recent financial report which covers a period of 12 months. This financial statement has been used alongside previous Starling reports in order to inform this report.
The team at C-Innovation has also sifted through Starling Bank’s blog entries, press releases, and media commentary from reputable sources such as Forbes, Business Insider, and the Financial Times.
This report is aimed at FinTech businesses, enthusiasts, and corporate banks looking for actionable takeaways which address Starling’s growth strategies, including its plans for expansion through Starling as a Service, ‘Starling International’, and the inclusion of partner FinTechs through the Starling Marketplace.
We review Starling Bank’s revenue diversification, product development, partnerships, and funding, frequently drawing parallels between the Bank and its market competitors.
To learn more about Starling Bank and its journey, download the full report or subscribe to get access to our list of FinTech deep-dives. For additional information on our report’s contents, please visit our website for the blog post on Starling Bank.
Summary of Report Contents
Starling’s Breaking Milestones
Team & Investors
Growing with the community
Early Strategy & Initial results
Approach to Marketing & Partnerships
Funding & Customer Growth
Business Model Overview & Evolution
Diversification of Products
Proprietary Platform & Benefits
Total Income, Costs & Operating Loss
Deposits, Loans, Transaction Volumes
Cash Flow Trends, Administrative Costs & Funding
Revenue by Business Line & Revenue Breakdown
Number of Customers
User Experience Compared
Number of Features Added & Features Compared
Business Banking Approach
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