Banking has traditionally been dominated by the branch model, making it difficult to service customers effectively. Where technology has been adopted by banks, typically it has been an expensive and frustrating process to integrate into a model that was designed in an analogue world.
Starling, which was founded in 2014, is a cloud-native, digital bank that delivers a wide range of financial services to both retail and SME customers. Core products include bank accounts, accessed via a mobile app, offering digital sign-up; instant notification of transactions; insights into spending habits; and 24/7 support. Starling is now also providing its technology to other financial services businesses and users via its “Banking-as-a-Service” offering, allowing customers to access its state-of-the-art payments systems and infrastructure.
Building a digital bank that is fit for purpose from the ground-up, has several advantages. Firstly, it is far easier and quicker to develop and launch a broad range of products and services to existing customers enhancing the functionality of the mobile app and improving the user experience. Furthermore, Starling has been able to deliver meaningful levels of profitability off a lower loan-to-deposit ratio due to its structurally lower cost base.
Starling remains focused on expanding the balance sheet via strategic forward flow agreements, organic lending across various asset classes and through targeted M&A. Additionally, the ramp-up of Starling’s “Banking-as-a-Service” offering will allow the company to expand internationally and enhance its margin profile.