Q&A Interview With Starling Bank’s Bold ‘Femtech’ Leader

As founder and CEO of Starling Bank, Anne Boden is one of the pioneers of fintech banking. In this Q&A interview, Anne discusses the impact of fintech banks and the opportunities, challenges and future prospects for app-only banking providers.

Starling Bank was one of the first app-only banks to be established in the U.K. After serving as the COO of Allied Irish Bank (AIB) until 2014, founder and CEO Anne Boden set her sights on building a mobile-first bank focused on the needs of the digital consumer. Starling received its full banking license early in 2017 and has been focused on introducing new digital functionality ever since.

While fintech challenger banks are slow to be introduced in the U.S., there is much more activity overseas. Last year, Atom Bank was the first app-only bank available to the public, with Monzo not far behind. Tandem is also targeting retail customers but has had some funding challenges.

How has the past year been for Starling?

Anne Boden: It was a year of ups. We received our license for a current account, launched our cards, and started the process of offering more solutions via APIs. It’s been busy. It’s been hugely challenging to get everything done. But it’s been hugely rewarding, and we’re excited for the next 12 months.

What Challenges Do You Face Differentiating Starling?

Anne Boden

Anne Boden: There’s a lot of talk about switching and customer inertia. There’s a popular statistic that suggests most people are more likely to get a divorce than to change their banking provider. However, until now, there really hasn’t been much difference between banks… other than the color of their carpets.

What we’re bringing to the market is a completely new way for people to see their money. We’re customer-first, mobile-focused and the Starling account is all about empowering customers. Moreover, we’re not saying that people have to switch everything to Starling or to leave their old bank.

Why should they have to switch when challenger banking allows them to have both? This is why we encourage people to try us, trial our current account and our app, and make up their own minds.

Do You Feel Pressure to Be a Global Leader?

Anne Boden: There are certainly moves for challengers to expand in the next few years – perhaps not 2017, but beyond that with banks like N26 heading in that direction. This is to be expected due to the globalized world we live in.

Of course, there are challenges. Expansion into any country is complex. From language and culture differences through to legal and financial regulations – there are many hurdles to leap before a bank goes global. That’s not to say it won’t happen … simply that we can expect it to take time.

What is Your Perspective on Reducing Acquisition Costs?

Anne Boden: Banks need to stop talking about customer acquisition. Customers cannot be “bought” – they must be won with ground breaking products that solve real customer problems. The best companies become recommended brands because of this, and that’s where we want to be.

Who is Your Biggest Competition?

Anne Boden: The banking sector needs competition. After the financial crisis, people changed, their needs had changed, and technology had changed, but the banking sector failed to follow suit. That’s why there are several challengers entering the sector now.

Fintech challengers are addressing real needs that have been overlooked historically – and are doing so for very focused areas. Because of this, many more products can exist in the financial ecosystem. Our main competition remains the incumbents.

Will Starling Be Expanding Its Product Line?

Anne Boden: For now, we are completely focused on revolutionizing the current (checking) account. This is one area that really needs innovation. Alongside this, we do have the marketplace, which is using an API strategy to ensure that customers have real choice when it comes to their money and access to the best in fintech products from other brands.

We also offer real-time payments through U.K.’s Faster Payment Service (FPS) and struck deals with Transferwise as our first Marketplace API partner as well as Moneybox for real-time savings.

What Do You See in the Future for the Fintech Industry?

Anne Boden: 2017 will be pivotal for fintech. Along with other buzz topics such as APIs and AI, there will be a coming of age for challenger banks. There are many new digital challengers gearing up for their full launch and the lifting of their banking restrictions. When this happens, it will herald a huge shift for the fintech sector, not least because bark will have to become bite. Finally, real competition in banking will exist. Customers will have real choice. And challengers will have a serious role in the financial landscape.

However, what we need to be incredibly aware of as an industry is that we do not lose sight of the customer. Giant corporations dominate 1 in every 4 fintech deals. The biggest banks remain in control of hundreds of millions in investment money. So, whilst there is plenty of opportunity ahead, fintech cannot get stuck in it its own echo-chamber and lose sight of its original purpose: challenging the status quo and empowering customers.

Learn More About The Challenger Bank Battlefield

The Challenger Bank Battlefield report provides insight into more than 30 fintech challenger banking organization globally. Beyond a review of the strategies and products offered, this report includes an analysis of the competitive positioning of the organizations reviewed. The report also includes interviews with challenger banking organization founders and financial services industry leaders like Anne Boden.

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