Throughout my career, I had been consistently told that current accounts were loss leaders. Banking folklore as I put it. But I challenged this notion. I believed that forgoing the branch network and creating more efficient technological processes would deliver a lean enough cost base to make current accounts profitable. Once this core product was running smoothly, we would have a firm foundation from which to offer other products, such as lending. So I launched Starling Bank in 2014, with the aim of delivering a fairer, smarter, and more human bank.
When did you realise you had product-market fit?
I always knew we had product relevance, but the proof point came in May 2017, when we launched our app. We were out of beta by October and receiving glowing reviews. Our small business account was launched in March 2018. We’ve now opened 2.4m accounts and are at the top of Which?’s rankings for bank customer service—one of only two banks that is a Which? recommended provider. We’ve also won the Best British Bank accolade at the British Bank Awards four years on the trot.
What has been your approach to growth? And how has this changed with every new round of funding secured?
Starling has been focused on its path to profitability from day one. We became monthly profitable in October 2020, and have recorded a profit every month since then. Of course, in the very early days, fundraising is needed to keep the lights on. But as you mature as a company and become less of a risk to investors, you can secure greater sums and begin to scale up and deliver on your business plan.
So more recent rounds of funding have allowed us to evolve the product, hire new colleagues and build our brand. But the focus on steady and responsible growth hasn’t gone away. Our most recent funding round is supporting a targeted expansion of Starling’s lending in the UK, as well as to launch Starling in Europe and for anticipated M&A.
How do you think the fintech industry has changed since you first started out?
There’s more focus from regulators and investors on profitability and responsible governance. The sector has moved on from growth at any cost, and we’ve seen the emergence of a handful of companies that have achieved success at scale. Fintech was very much about failing fast and growing quickly a decade ago, and while that might still be true for some startups, there’s a focus on the culture and mission of financial services brands, now more than ever.
That goes for consumers too. They want to know the bank they’re choosing is both responsible and ethical. It’s one reason we’ve recently begun making our bank cards from recycled materials and campaigning for better representation of women when it comes to money in the media.
What do you see as emerging trends in the sector?
The big shift has been toward products and services that are relevant and useful, and away from those that are not driven by need. That’s what’s really going to differentiate companies now. Furthermore, the companies that produce the very best technology can not only use this to service their customers, but offer that technology to other companies across the globe, by white-labelling their offering. No doubt automation will continue to bring with it cost-savings and new technological opportunities, but for Starling, we still believe a human at the heart of the service is key.
Why do you think Starling has been so successful—what did you do differently that allowed you to succeed where others failed?
We’re known for our execution ability; this is what really makes us stand out. We embraced technology and delivered a truly smart bank, but with humans at the core—in our call centres, interacting by email, webchat, phone or app. It’s been about serving customers in the ways they prefer. We’ve married this with a culture of transparency and plain-speaking. You won’t hear jargon from our colleagues, be it during an in-app conversation or a digital billboard ad.
What have been some of the biggest opportunities and challenges of COVID-19 for Starling?
We’ve supported tens of thousands of small businesses through government-backed lending schemes. That was both an opportunity and a challenge—to ensure those businesses were supported before, during, and after accessing funds. It’s been interesting to note that some companies which accessed capital actually found business busier than ever during the crisis, and so instead used funds to invest and grow, rather than simply survive.
With the pandemic boosting uptake of digital banking, it puts us in the drivers’ seat to take a greater share of the market. This will, as ever, be fueled by building more products that are relevant and useful to the changing needs of businesses and consumers.