There is an awful lot of hype surrounding the fintech industry; some of it unjustified.

Many startups and enterprises are simply jumping on the “disruptive – in a good way” bandwagon, without offering products or services that are clearly differentiated from the ones offered by the big banks – or noticeably cheaper, faster, or more efficient.

But that is certainly not the case with Starling Bank.

Last week, Starling, the fintech challenger bank led by an ex-banker, Anne Boden, and backed by a $70 million-dollar investment from Bahamas-based quant fund manager Harald McPike, continued to show its mettle as the self-styled “tech business with a banking licence.”

This kind of slogan could be mistaken for a bit of slick marketing but in Starling’s case the fintech firm means every word.

What happened last week? Starling announced that it has signed another agreement with a third-party provider, to open up its API for use by Yoyo Wallet, the UK based mobile payment and loyalty platform.

API, or Application Programming Interfaces, for the uninitiated, are the next big thing in global banking, and the UK is leading the charge. As of January next year, a new set of directives, known as PSD2 (Payment Services Directive 2) will come into force across Europe, that will force banks to share their customer’s information with third party providers, if the customer requests it.

The big banks have grudgingly agreed to do this – great news for apps like Yoyo Wallet, or Curve, the digital financial management app, or indeed any app that wants access to customers banks accounts and the ability to authorise payments on their behalf.

But Starling are currently running ahead of the game – they have already opened up their API’s to other fintech or third party firms. The “Challenger Bank” even ran a hackathon earlier this year where hundreds of developers were allowed to play with Starling’s APIs and come up with innovative new uses for the information they were being given access to.

A couple of months ago, Starling opened up their API’s to a startup called Flux, which specialises in paperless receipts. Starling users can activate Flux directly from inside the Starling app.

Thus, Flux became the first integrated partner of the “Starling Bank Marketplace”, and YoYo Wallet the second. The Starling bank marketplace is like an app store for fintech services that are complimentary to the services that Starling provides – anything from insurance, to money saving apps, to investment advice.

It’s incredible to think that no high street bank has attempted to do something similar given the idea makes so much sense.

Every customer wants to have

• A holistic view that displays all of their financial accounts in one place;
• The opportunity to add additional services that will help them manage their finances better and get discounts and rewards every time they use their payment card;
• The opportunity to review different services and authorise the ones that suit them the best to perform certain controlled transactions on their behalf;

And that is exactly what the Starling Bank Marketplace is attempting to provide.

Once a YoYo Wallet account has been linked with Starling, every time a Starling customer uses their Starling payment card at a Yoyo accepting high street merchants, they will instantly earn retailer-specific loyalty points, which can be exchanged for rewards, discounts and offers. This includes participating stores like Planet Organic, Fernandez and Wells, and HOP Vietnemese.

Expect to see more and more products and services added to the Marketplace offering an increasingly diverse range of options. In fact, pretty soon, it is likely that Starling will be far from the only digital bank offering extra, fully integrated services that can be activated and used in-app.

The advantage of these marketplaces for the user is that it allows them to control all of their finances from one central hub. The advantage for the digital “tech firm that does banking” is that customers can perform all the actions they need from within the app, which means the firm can act as a third-party recommendation engine – much like the Tencent-owned WeChat app does in China.

At The Money Cloud, we do something similar for overseas money transfer, allowing our users to compare different services, using API driven, real-time prices, and select the service they like the most, based on price, fees, transaction times, or any other variable.

We will be hearing a lot more about PSD2 and the opening up of financial services to new, agile, tech driven, disruptive solutions (often tested out in government organised “sandboxes” to ensure their effectiveness), over the next year.

But it’s great to see fintech firms taking these new regulations and running with them. Creating exciting and effective new solutions for their customers, whilst their more traditional, high street banking rivals are still scratching their heads and wondering how they will incorporate all these new rules and regulations.

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