The latest of the so-called “challenger banks” is set to launch very soon - they’re called Starling Bank, and they’re billing themselves “a bank that doesn’t really act like a bank at all.” But who are they, what are they claiming to do differently, and will we all be changing our accounts over to Starling Bank in the coming year, or will they turn out to be “just HSBC with bells and whistles on”?
How did Starling Bank come about?
CEO and Founder of Starling, Anne Boden began her career at Lloyds Bank, pioneering the CHAPS system. Her career then took her to several other banks including Standard Chartered and RBS, before she joined Allied Irish Bank. As COO, and after travelling the world, seeing the changing face of technology, she wanted to apply some of the tech she’d seen in other industries - real-time insights, and modern intelligence to the bank. However, frustrated at the legacy technology and outdated systems most incumbent banks are lumbered with, she decided to start her own version of a modern bank in 2014 - and in Charing Cross in London, Starling was born.
Starling received a lot of press on the way to becoming a bank. CTO Tom Blomfield famously left the bank to start his own - which went on to become Monzo, and in early 2016, a $70 million investment really got them moving. Fast forward to January 2017, Starling are set to launch very soon, and hopefully the banking world will never be the same again.
When did Starling Bank get its license?
July 14, 2016. Starling became Starling Bank, and the team announced their intention to launch a beta programme “By the end of 2016”.
When will Starling Bank launch?
Starling Bank aimed to deliver a current account to their first customers in January 2017. While their social media profiles shows some of their staff testing out their new purple debit cards, they’ve now got less than a week to deliver within that timeframe, so it could be more likely to be "Q1 2017".
— Deborah Keay (@Deborah_Keay) 13 January 2017
What will the products be?
Starling Bank’s USP is that they are only launching “an exceptional current account”. By focussing their efforts on that, rather than a full suite of products - savings, mortgages etc. their current account "won’t be like any other current account you’ve seen before”. Anne Boden said “I don’t believe a start-up bank can beat big banks. They can’t offer all of the products to all the customer groups through all of their channels. You need to focus and do one thing really well; 20 times better than everyone else to give people a reason to bank with you”.
What makes them different?
Starling Bank are making heavy use of AI in order to give customers a real insight into their spending and saving habits. The current account app will monitor a customer’s spending, and predict how they could change their habits in order to save some money - “You’re spending too much at Starbucks, have you tried this coffee shop instead?”. Or perhaps, “Your car insurance payment increased by £123 this year, you could save money by switching to this policy which better suits your needs”. It’s clever stuff. Of course, there are several apps which offer a similar “Personal AI Assistant” functionality, all powered - and monetised - by affiliate links - so it's a balance of being a genuinely useful part of the customer’s life, and pushing too hard to make a profit from each recommendation.
Anne Boden also revealed that she wants Starling Bank to “be more like Facebook or Google than a traditional high street bank”. Using data insight, they’re promising “intelligent banking, not just a mobile version of paper statements”.
Not unlike Facebook, there may well be some gimmicks, or style over substance, but some features might just be ground-breaking: we love the idea of choosing a custom account number. It’s so simple, but so obvious, and so 2017. And just this week, Starling Bank announced they’ll be among the first of the UK banks to support “Faster Payments” for real-time, immedate money trasnfers.
As for what else might make the app and the current account a game-changer remains to be seen, but we’ll find out soon enough.
Who are their main competitors?
By focussing solely on a current account, at the moment they’re on their own.
Looking more widely, it’s easy to draw comparisons to similar challenger banks like Atom Bank, Tandem Bank - there will be an app with great UI and 21st century features, but no fixed-rate savers, and no 'digital mortgages', so Starling have carved out a niche of their own.
They may well fold in specific functionality from a lot of other single purpose apps such as Moneyhub (savings assistance), or Money Dashboard (spending analysis). We think it’ll be somewhere in between - more like prepaid card (but soon to be current account) Monzo.
Are they any good?
Who knows! With a product launch happening "very, very soon", we'll be the first to have Starling Bank reviews, and if you’re an early adopter, please share your own experiences with our community and help others decide if Starling is the bank they’ve been waiting for.