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Starling Bank

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Starling Bank Limited
Starling Bank
Company typePrivate
IndustryFinancial services
Founded18 June 2014; 10 years ago (2014-06-18)
FounderAnne Boden Edit this on Wikidata
Headquarters
London Edit this on Wikidata
Area served
United Kingdom
Key people
Raman Bhatia CEO
ProductsRetail banking
(personal & business)
RevenueIncrease £682.2M [1] (2024)
Increase £220.0M [1] (2024)
Number of employees
3,500 (2024) Edit this on Wikidata
Websitewww.starlingbank.com Edit this at Wikidata

Starling Bank (/ˈstɑːrlɪŋ/) is a British bank, occasionally referred to as a digital challenger bank or neobank, providing current and business bank accounts in the United Kingdom.[2][3] Starling Bank is a licensed and regulated bank, founded by former Allied Irish Banks COO, Anne Boden, in January 2014.[4] Since its founding, it has received over £500M of funding.[5][6][7]

The bank offers a range of limited personal and business banking services through its mobile app including, among other services, personal current accounts, joint accounts, business accounts, and Euro accounts.[8][9][10] With a focus on technology and user experience, Starling Bank has become an alternative to traditional high-street banks.[11] The bank’s headquarters are in London, United Kingdom. It is authorised by the Prudential Regulation Authority and the Financial Conduct Authority.[12][13]

History

[edit]

Starling Bank was founded as a digital challenger bank by Anne Boden in January 2014. The company received its banking licence from the Prudential Regulation Authority and the Financial Conduct Authority in July 2016.[14][15] It launched its beta for personal current accounts in March 2017.[2][16] In March 2018, Starling launched business accounts.[10][17] In February 2019, it launched personal Euro accounts in the UK.[9] Initially Starling customers could make fee-free conversions between the Starling GBP account and Euro account, but in September 2019 the bank introduced a 0.4% conversion fee.[18]

Anne Boden, CEO of Starling Bank, speaking at MoneyConf in 2018

In 2016, Starling raised £48 million.[19] Founder Anne Boden announced in December 2017 that the bank intended to apply for the RBS Remedies Fund.[20] In February 2019, Starling raised £75m from Merian Global Investors.[21][22] The following week, the company announced it had raised £100m from the Capability and Innovation Fund in the form of grant funding.[5] In March 2021, Starling announced a £272m funding round, with investors including Fidelity, the Qatar Investment Authority and Millennium Management.[23]

The bank has partnered with other companies to offer some of its services. In March 2017, Starling began to use Wise to process international payments.[24] In November 2018, the company partnered with the Post Office to allow account holders to deposit and withdraw funds at any Post Office branch.[25]

In late 2020, The Times reported that larger banks were looking at acquiring Starling.[26] The CEO of Starling denied reports and stated they aimed for an initial public offering by 2022.[27]

In its annual report for the year ending 31 March 2022, Starling announced it had become the first challenger bank to become profitable, reporting pre-tax profit of £32.1 million on revenues of £188 million. This was up from a pre-tax loss of £31.5 million the previous year.[28] Starling founder, Boden, put this down to its push into the mortgage market, which saw it grow its mortgage loan book to over £2 billion.[28] In June 2022, it revealed that customers had opened 3 million Starling current accounts, including more than 460,000 business current accounts.[29]

In its annual report for the year ending 31 March 2023, Starling announced it had become the first challenger bank to become profitable for two consecutive years, reporting pre-tax profit of £195 million on revenues of £453 million.[30] It was also announced that founder and CEO Anne Boden would be stepping down as CEO from 30 June 2023 Anne will remain on the board of directors with current Starling COO, John Mountain stepping up as Interim CEO of Starling.

In March 2024, the company announced the appointment of Raman Bhatia as its new, permanent chief executive, joining from OVO Energy.[31] Bhatia took up the position formally that summer, replacing John Mountain.[31] In his first major policy change, Bhatia ordered all hybrid staff to travel to work for a minimum of 10 days each month.[32]

In its annual report for the year ending 12 June 2024, Starling announced it had become the first challenger bank to become profitable for three consecutive years in a row, reporting pre-tax profit of £301.1 million on revenues of £682.2 million.[30]

In October 2024, the Financial Conduct Authority (FCA) fined Starling Bank £29 million ($38.5 million) for deficiencies in its anti-money laundering controls and sanctions screening systems, which dated back to 2017. The FCA noted that Starling opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023. Problems were first identified in 2021 during a review of financial crime controls in the challenger bank sector. By January 2023, the bank discovered its screening system had only assessed a fraction of the sanctions list since 2017. Starling accepted the FCA's findings, apologized for the historical failings, and emphasized that it had invested significantly to rectify these issues, including enhancing board governance. Although the initial fine was set at £41 million, Starling received a 30% discount for its cooperation with the FCA.[33]

Locations

[edit]

Starling does not have physical branches. The company has offices in London, Cardiff, Southampton and Manchester.[34][35] For customers who want to deposit cash into their accounts, it has partnered with the Post Office to offer services in branches and other designated locations across the UK.[36]

Cards

[edit]
A debit card issued by Starling Bank.

Starling Bank offers a contactless Debit Mastercard. As of September 2019, Starling cards were not part of the LINK network.[37]

Starling changed the design of its cards in July 2018, to a vertical card design coloured teal and navy.[38] In March 2021, Starling announced their new and replacement debit cards would be made from 75% of recycled rigid PVC plastic.[39]

In addition to physical cards, Starling Bank also offers its customers the ability to create multiple virtual cards within the app. These virtual cards can be used for online purchases and can be set up.[40] Customers can also set limits, block and unblock their virtual cards for security and control. The ability to create multiple virtual cards allows customers to easily separate their spending into different categories, such as entertainment, groceries, or travel, making it easier to track spending.[41][42][43]

Mobile apps

[edit]

The focus on technology and user experience has been a key differentiator for Starling Bank. The bank primarily serves customers via mobile banking apps on iOS and Android.[44]

The features of Starling's mobile apps include instant notifications of transactions, freezing and unfreezing customers' cards to prevent unauthorised transactions, categorising transactions for later analysis, creating separate "goals" where money can be stored separately to a customer's main balance, and in-app chat with customer service representatives.[45] The bank also offers a 'Settle Up' feature, where customers can send money to their contacts.[46] The app also features real-time notifications and spending insights, aiding customers in making informed financial decisions. In 2017, Starling claimed to be the first UK bank to support in-app setup for Apple Pay.[47]

Engine

[edit]

In February 2022, Starling created a subsidiary business for its banking-as-a-service platform, Engine, through which it plans to white-label to other firms to allow them to use its systems for processing payments, card transactions and opening customer accounts.[48]

Welsh Government video of Anne Boden introducing herself and Starling Bank, July 2020

Acquisitions

[edit]

Fleet Mortgages

[edit]

In July 2021, Starling announced it had acquired specialist buy-to-let mortgage lender Fleet Mortgages for £50 million. Fleet Mortgages had around £1.75 billion of mortgages under management at the time of the acquisition. Starling said Fleet Mortgages would retain its brand and management team.[49]

Masthaven

[edit]

In June 2022, Starling bought a £500 million mortgage portfolio from specialist lender Masthaven.[50] Masthaven had announced plans to wind down its operations by selling its mortgage book by 2023.[51]

Awards

[edit]

Starling Bank received the Best British Bank award in the British Bank Awards for four consecutive years – 2018 to 2021.[52]

Starling Bank received the Best British Banking brand award by Which? for four consecutive years – 2021 to 2024.

Starling Bank won the best mobile banking app and best kids account in the British Bank awards 2024.

Senior leadership

[edit]
  • Chairman: David Sproul (since October 2021)[53]
  • Chief Executive: John Mountain (interim; since July 2023)[54]

List of former chairs

[edit]
  1. Oliver Stockton (2015–2021)[53]

List of former chief executives

[edit]
  1. Anne Boden (2014–2023)[54]
  2. John Mountain, Interim (2023-2024)

See also

[edit]

References

[edit]
  1. ^ a b "Annual Report & Consolidated Financial Statements 2023 | Starling Bank" (PDF). starlingbank.com. Retrieved 12 June 2024.
  2. ^ a b O'Hear, Steve (16 March 2016). "Starling Bank, a digital-only UK challenger bank, launches beta". TechCrunch. Retrieved 5 November 2018.
  3. ^ "Starling Bank moves into business banking". Finextra. 29 March 2018. Retrieved 5 November 2018.
  4. ^ "Certificate of Incorporation of a Private Limited Company" (PDF). Companies House. 18 June 2014. Retrieved 4 April 2023.
  5. ^ a b Morrison, Caitlin (22 February 2019). "Metro Bank and Starling get millions from RBS fund to boost banking competition". The Independent. Archived from the original on 24 May 2022. Retrieved 29 December 2019.[failed verification]
  6. ^ "Starling raises $70m for UK banking market push". Financial Times.(subscription required)
  7. ^ Taylor, Charlie (13 February 2019). "Starling Bank raises £75m to fund international expansion". The Irish Times. Retrieved 29 December 2019.[failed verification]
  8. ^ "Joint bank account: Set up in minutes". Starling Bank. Retrieved 10 February 2023.
  9. ^ a b "Starling Bank launches euro debit card". UKTN (UK Tech News). 30 October 2019. Retrieved 1 February 2020.
  10. ^ a b Key, Alys (29 March 2018). "Challenger bank Starling launches business accounts as it eyes £120m RBS competition pot". City A.M. Archived from the original on 31 March 2018.
  11. ^ "Starling 'Best British Bank' four years running". Starling Bank. Retrieved 10 February 2023.
  12. ^ Williams-Grut, Oscar (23 April 2017). "'Big banks want to come see us every week': Starling CEO Anne Boden on building a bank from scratch". Business Insider. Retrieved 5 November 2018.
  13. ^ Hancock, Ciarán. "Bold move into on-line banking by Anne Boden". The Irish Times. Retrieved 2 August 2019.
  14. ^ Wallace, Tim (14 July 2016). "Mobile-only bank Starling wins its licence". The Daily Telegraph. Retrieved 5 November 2018.(subscription required)
  15. ^ "Starling Bank secures banking license; to launch in January 2017". Finextra. 14 July 2016. Retrieved 5 November 2018.
  16. ^ Munford, Monty (28 March 2017). "Mobile banking is saving us 'billions' in charges". BBC News. Retrieved 5 November 2018.
  17. ^ Withers, Iain (4 October 2017). "Starling takes on the big banks with business lending play". The Daily Telegraph. Retrieved 5 November 2018.(subscription required)
  18. ^ "Got a Starling Euro account? - Beware the new 0.4% conversion fee - Money Saving Answers". moneysavinganswers.com. 30 August 2019. Retrieved 2 May 2022.
  19. ^ Williams-Grut, Oscar (20 April 2017). "Startup bank Starling raised £48 million last January — and it took 16 months for £30 million of it to come through". Business Insider. Retrieved 5 November 2018.
  20. ^ Rumney, Emma (10 December 2017). "Britain's smaller banks jostle for business banking grants". Reuters. Retrieved 5 November 2018.
  21. ^ Megaw, Nicholas (13 February 2019). "Starling raises £75m as it plots European expansion". Financial Times.(subscription required)
  22. ^ O'Hear, Steve (13 February 2019). "Starling Bank, now with 460K consumer accounts, raises £75M more for European expansion". TechCrunch.
  23. ^ "Starling Bank swoops in £270m share sale to global investors". Sky News. Retrieved 9 March 2021.
  24. ^ Bell, Lee (15 March 2017). "TransferWise partners with digital-only Starling Bank". Wired. Retrieved 5 November 2018.
  25. ^ Field, Matthew (14 November 2018). "Digital bank Starling heads to the high street following Post Office deal". The Daily Telegraph. Retrieved 25 November 2018.(subscription required)
  26. ^ "JP Morgan and Lloyds set sights on Starling". The Times. 28 November 2020. Retrieved 18 December 2020.
  27. ^ "Starling's Anne Boden has 'eyes on a float' as she dismisses takeover talks". The Telegraph. 11 December 2020. Retrieved 18 December 2020.
  28. ^ a b "Starling Bank's 2022 results include first full year of profitability as mortgages pay off". AltFi. Retrieved 6 April 2023.
  29. ^ "Starling Bank hits 3m accounts". AltFi. Retrieved 6 April 2023.
  30. ^ a b "Annual Report & Consolidated Financial Statements 2023 | Starling Bank" (PDF). starlingbank.com. Retrieved 31 March 2023. Cite error: The named reference "starlingbank.com" was defined multiple times with different content (see the help page).
  31. ^ a b Martin, Ben (13 March 2024). "Starling Bank poaches Ovo boss as it targets stock market listing". The Times. ISSN 0140-0460. Retrieved 13 March 2024.
  32. ^ Makortoff, Kalyeena; correspondent, Kalyeena Makortoff Banking (19 November 2024). "Starling Bank staff resign after new chief executive calls for more time in-office". The Guardian. ISSN 0261-3077. Retrieved 21 November 2024. {{cite news}}: |last2= has generic name (help)
  33. ^ "Starling Bank fined 29 million pounds for financial crime failings". 2 October 2024. Retrieved 2 October 2024.
  34. ^ "About Starling Bank". Starling Bank. Retrieved 30 November 2022.
  35. ^ "Starling Bank creates 1,000 new jobs and unveils new Manchester office". AltFi. Retrieved 6 April 2023.
  36. ^ "Starling Customer Service". Starling Bank. Retrieved 10 February 2023.
  37. ^ "Our Members". LINK. Retrieved 15 November 2018.
  38. ^ Dawood, Sarah (25 July 2018). "Online bank Starling introduces vertical bank card". Design Week. Retrieved 29 December 2019.
  39. ^ "Our new debit cards: A greener way to pay". Starling Bank. Retrieved 15 March 2021.
  40. ^ "Virtual cards: Spend directly from a Saving Space". Starling Bank. Retrieved 10 February 2023.
  41. ^ "Card security controls: Disable contactless card". Starling Bank. Retrieved 10 February 2023.
  42. ^ "Bills Manager: All your bills in one place". Starling Bank. Retrieved 10 February 2023.
  43. ^ "Saving Spaces: Manage your savings". Starling Bank. Retrieved 10 February 2023.
  44. ^ "Download the Starling Bank app". Starling Bank. Retrieved 10 February 2023.
  45. ^ Money, Memore (4 July 2021). "Starling Bank full review". www.memoremoney.com. Retrieved 4 July 2021.
  46. ^ Casserly, Martyn (14 May 2018). "What is Starling Bank and is it safe to use?". Tech Advisor. Retrieved 2 August 2019.
  47. ^ Fingas, Roger (18 July 2017). "UK's mobile-only Starling Bank adds Apple Pay support". Apple Insider. Retrieved 5 November 2018.
  48. ^ Quinio, Akila; Dunkley, Emma; Venkataramakrishnan, Siddharth (30 July 2023). "Can Starling Bank make tech its business?". Financial Times. Retrieved 3 August 2023.
  49. ^ "UK digital bank Starling buys lender Fleet Mortgages". Reuters. 26 July 2021. Retrieved 6 April 2023.
  50. ^ "Starling snaps up £500mn mortgage book in shift from Covid loans". Financial Times. 14 June 2022. Retrieved 6 April 2023.
  51. ^ Hinchliffe, Ruby (15 June 2022). "Starling Bank to buy £500mn Masthaven portfolio". FT Adviser.
  52. ^ Moore, Anna (8 November 2020). "It's crazy, but I started my own bank: the story behind Starling". The Guardian. Retrieved 12 November 2020.
  53. ^ a b Field, Matthew (16 July 2021). "Starling Bank picks former Deloitte chief as chairman". The Telegraph.
  54. ^ a b Browne, Ryan (25 May 2023). "Boss of Goldman-backed digital bank Starling to step down next month". CNBC.
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