Starling Bank was founded in 2014 by Anne Boden, a banker with a background in technology, who was on a mission to make money better for everyone. Anne envisioned a different type of bank, one which served customers in a way that traditional banks didn’t and embraced technological changes that were rapidly occurring at the time.
Founded in 2014, the bank gained authorisation by the PRA in 2016 and was launched in app stores in May 2017. Since then, it has opened more than two million accounts, including 350,000 accounts for small and medium-sized enterprises. It has more than £2billion of lending on its books and holds more than £6billion on deposit.
Along the way, the bank has been able to successfully raise capital from investors. Most recently it raised £322 million in Series D funding, giving it a valuation of £1.1 billion pre-money. Its slate of institutional investors includes some of the world’s biggest financial heavyweights, including Goldman Sachs, Fidelity Management & Research Company (Fidelity), and RPMI Railpen (Railpen), the investment manager for the £31 billion Railways Pension Scheme.
As Chief Banking Officer at Starling, Helen Bierton is responsible for the commercial propositions within the bank including lending, SME and Retail Banking, Marketplace and Starling’s B2B Banking Services. Here she talks about Starling Bank; how they operate, how they’ve evolved and what the future holds.
What is the ‘issue’ Starling set out to solve?
Starling was set up to be a fairer, smarter and more human alternative to the banks of the past. We really wanted to make banking more accessible for everyone and we wanted to help people, whether that was on their personal finance journey or enabling them to start and grow their businesses.
How has Starling gone about taking on this challenge?
We started from scratch. We built our tech ourselves so that we could build a bank that really catered to what people needed and we continue to use this approach. The approach to tech means that we can respond quickly, we’re always listening to our customers and improving and innovating our products based on their feedback. We also use customer data to help us understand what they need from us when building new products.
What is a key restriction or challenge you’ve overcome?
There have been many challenges along the way. Anne has spoken about one hurdle in the early days which was getting funding, as investors couldn’t see past their idea of what a Founder looked like. But after we got over that initial hurdle, we’ve been able to get the support that we need to build a bank to help people feel good about money.
What makes Starling stand out?
Starling’s customer-centric approach means that it stands out to both business and personal account customers.
Everything has been designed to help customers be and feel more in control. Take our Spending Insights feature. It breaks down your spending by category (for example, groceries, holidays, transport) or merchants (Boots, Amazon, Tesco) so you can get a clear picture of where your money really goes in real-time.
We also have a great feature called “Saving Spaces” which enables customers to save towards a specific goal. We like to think of these spaces or goals as a virtual piggy bank since they’re separate from a customer’s main balance.
Customer service is a real priority for us, our customers can talk to a real human being 24/7, allowing us to help them at times that suit them. It’s one of the many reasons why we were voted Best British Bank in 2018, 2019 and 2020 and why we topped the Which? customer satisfaction table for 2020.
What key opportunities have pushed Starling to where it is today?
While the pandemic posed many challenges for everyone, it also created opportunities. For us one of these was to become an accredited lender under the government-backed lending schemes, the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme.
So when the lockdown started and small business owners needed emergency help, we were there to help them with these schemes, making 55,000 loans worth more than £1.6billion to our SME customers. They include the web designer who needed to hire more staff, the glove maker that used their loan to buy new equipment and the distributor of hair products that needed help with cash flow.
We also built a groundbreaking retail ‘Connected card’ for individuals who were sheltering in place and who had suddenly to rely on trusted friends and neighbours to get their shopping for them. The connected card is a secure and safe second card on your account that you can give to others to pay for things for you.
What does the future hold for Starling and its customers?
We’re planning a targeted expansion of Starling’s lending in the UK, including through M&A and we’re looking to expand into Europe.
Our customers, both personal and business might be looking at uncertain times as we hopefully leave this pandemic behind, but we’ll always be there to support and help them grow in their money journey. Making finances simpler, easier and clearer for all.