Feedback: Starling against the tide

At a time when fintechs are laying off staff, the neobank Starling has announced a massive hiring plan and the launch of new activities in the UK.

FACTS

• Starling Bank plans to hire up to 1,000 people when it opens its fourth UK office in Manchester.

  • The bank is recruiting for roles across the business, including software engineering, operations, data science, cyber security and customer service, with nine vacancies already online.

• In an email to selected customers, Starling asked for their views on "new products and services the bank is looking to offer", with a survey attached that contained five questions about mortgages.

  • Starling has been rapidly building a £2bn+ portfolio of specialist mortgages via its acquisitions of buy-to-let lender Fleet Mortgages in 2021 and the purchase of a portfolio of mortgages from Masthaven in 2022.

• Amongst new products this year-end, Starling has also announced a new programme to encourage its customers to create dedicated savings accounts for up to five different types of spending (a service launching in November 2021) and then create a virtual card for each which they can use to make payments online and in shops directly from the funds they have specially set aside.

  • The aim of this programme is to give customers greater visibility and control over their budgets by categorising them by type of expenditure.

• Finally, Starling also made two tariff announcements

  • The bank is preparing to remove the £2/month fee it previously charged on additional GBP personal accounts, joint accounts and business accounts.

  • It has also scrapped the £60 one-off fee it used to make to replace an overseas debit card, with this cost reducing to just £10 shortly.

CHALLENGES

• Taking on the role of a responsible 'real bank': Passing the profitability mark in December 2020, Starling Bank recently presented its annual results and confirmed that it has become a profitable business. This profitability is particularly important in the current period of declining investment, which is weighing on other market players. Starling's responsibility is also demonstrated through its ethical positioning when the bank announces that it refuses to advertise on Meta, as long as the group does not respect its obligations in the fight against online fraud, or when it decides, against the current trend, to block all card payments to crypto merchants and to restrict other outgoing and incoming bank transfers linked to cryptography

• A singular positioning that demonstrates a very strong customer focus: Many of the products Starling has launched always have a customer-focused foundation. Whether it is to facilitate bereavement, improve budget management for its customers, customise card limits or allow the sharing of bank cards to facilitate the management of expenses in dependent situations.

MARKET PERSPECTIVE

• Last July, the new bank, which has more than three million customers in the UK, cancelled its application for a licence in Ireland to provide banking services in the European Union. But the bank has not given up on expanding its activities. It will do so via its Banking-as-a-Service business, which allows businesses to create their own financial products, such as savings or current accounts, integrated digital wallets, children's cards and debit cards... from Starling's banking platform.