Starling Bank withdraws application for licence in Ireland

Digital challenger bank Starling will not proceed with its application for a banking licence in Ireland, after deciding that an Irish subsidiary would not deliver enough value.

The app-based bank will now put more focus on selling its banking software-as-a-service offering to other banks globally.

It had successfully navigated the first stage of applying to the Bank of Ireland for a licence and had been invited to submit its full application, which would have enabled it to offer banking services across the European Union.

“We have now concluded that market conditions and the bank’s own expansion plans mean that securing an Irish banking licence is no longer a top priority,” said a statement from the bank. “It has therefore decided not to proceed with the final stage.”

The UK bank had set its sights on a banking licence in Ireland as part of a planned expansion across Europe. The project was temporarily put on hold during the pandemic and later revived with plans that also included a banking-as-a-service proposition for EU customers. 

Starling received its banking licence in 2016 and launched the following year. In October 2020, it made its first monthly profit of £800,000, becoming the first UK digital challenger bank to do so.

The UK fintech unicorn has more than two million customer accounts, including more than 300,000 small business accounts. Its total lending exceeds £2bn and it has more than £5.4bn deposited with it.

Anne Boden, founder and CEO of Starling, said ending the application was was a tough call to make because the company has had Ireland in its sights for so long. “Sometimes changing course is the right option,” she said. “My job as CEO is to constantly test our thinking against evolving circumstances and to make sure we are delivering value and maximising potential for growth. Ultimately, we felt that an Irish subsidiary would not deliver the added value we are seeking.

“I would like to thank our amazing Irish team, who have worked so hard on this.”

Starling recently announced plans to scale its banking-as-a-service and software-as-a-service propositions worldwide, which is an area of focus going forward.