Starling Bank takes its banking-as-a-service into European Union

Starling Bank is expanding its banking-as-a-service model into continental Europe, enabling businesses outside the financial sector to launch financial services.

It means businesses such as retailers can offer services to their customers, such as current accounts or debit cards, without the need for heavy technology development or regulatory approval.

Through Starling’s application programming interfaces (APIs), customers can access the services without the tech investment, and regulatory approval will also be unnecessary because the service will be operated using Starling’s banking licence. 

Starling launched the offering in 2018, and its first customer was savings fintech Raisin UK. In the UK, Starling’s banking-as-a-service now has 25 customers, including CurrencyCloud, Moneybox and Vitesse.

In the first half of next year, Starling will expand the service into the European Union.

Starling’s APIs can be implemented with a few lines of code and give user businesses access to major payment systems such as Faster Payments, Sepa and Bacs.

“The thriving technology and fintech scene in European markets makes them a great fit for the culture of innovation at Starling, and therefore a natural space for us to offer and develop our solutions in Europe,” said Starling CEO Anne Boden.

In the past, financial services firms and companies such as retailers have partnered banks to offer financial services whereby they brand the front end but the banking service, which includes the systems and regulatory approval, is provided by a traditional bank.

Starling’s banking-as-a-service will appeal to businesses that want to offer banking services delivered via the latest technology.

App-based Starling Bank was designed by Boden, a banker with an IT background. It aims to use modern technology to make banking as convenient as possible, while enabling customers to benefit from the data they generate in their everyday lives.

As a company that leads on tech, with a tech-heavy workforce, the banking-as-a-service model is a natural fit alongside the more traditional services of a bank.

In 2016, Starling received its UK banking licence and last year became the first UK digital challenger bank to report a profit. The £800,000 operating profit for the month October, which appears insignificant in a sector where profits are counted in billions, was a major milestone. Earlier this year, it achieved unicorn status after a funding round took its value above £1bn.