After more than 30 years as a technologist and a banker, including a stint running transaction banking for ABN Amro and Royal Bank of Scotland across Europe, Middle East and Africa, Anne Boden came to the conclusion that the only way to give customers what they truly desire was to create a completely new banking experience.
“We live in a world where customers’ expectations are very high and, in response, many industries have transformed their business models – banking is ripe for this disruption,” she says.
In July 2012, she was hired as chief operating officer at Allied Irish Banks to orchestrate its digital transformation. She left after 18 months with the intention of building a digital bank from the ground up.
Ms Boden, who founded Starling Bank in January 2014, says: “I feel passionately that by focusing on one thing and doing it very well we can deliver something special to our customers and make their financial lives much easier.”
Making a difference
As one of the challengers positioned to shake up the UK retail banking industry, Starling Bank’s goal is simple: to provide a current account tailored to people who are savvy smartphone users. “We won’t be offering a range of products to many different market segments,” Ms Boden explains. “Our current account is for people who find that every other part of their life can be delivered through their mobile phone and yet their banks aren’t keeping up.” The new bank will be entirely online, without a physical branch network.
While other digital banks talk about targeting ‘millennials’, she stresses that Starling Bank is focused on a specific mindset. “Our customers will be those who want a current account that is part of their day-to-day financial lives and provides a responsive banking experience. It’s an attitude, not an age group.”
Another differentiator that marks Starling Bank out from its peers is that the majority of its technology is being built in house, not with off-the-shelf solutions. “If you use what everybody else uses, then you will have the same product as everyone else. Customers are demanding more,” says Ms Boden.
She talks about combining the best technology in the marketplace currently used by Google and Netflix in order to deliver a different banking experience. “We are putting into the hands of our customers the tools that they consume in other parts of their lives, so that they can truly manage their money day to day,” says Mr Boden. She declines to go into further detail at this stage, but thinks that customers will be pleased that Starling Bank’s offering is “quite refreshing”.
Without completely ruling out white labelling the technology, she stresses that it is not the bank’s priority. “We aren’t selling technology services; our focus is on providing the best current account to our customers,” she says.
Regulatory hurdles
Starling Bank’s toughest challenge to date has been in obtaining a UK banking licence. It is an important step, according to Ms Boden, because it is proof that Starling Bank has met compliance and governance standards, and is therefore allowed to provide a range of services to customers, for example, overdrafts and payment services. It also means that customer deposits are protected under the Financial Services Compensation Scheme.
Despite UK regulators easing requirements for new banks in March 2013, the licence application process remains tough. However, Ms Boden believes that it is the correct approach for the regulators to take. “People are entrusting their money with us, therefore it is important that we have the processes, capital and all the correct reassurances in place,” she says. “Becoming a bank shouldn’t be an easy process but one that is difficult enough to ensure that only those institutions that are capable of delivering a service are in the marketplace.”
Starling Bank hopes to obtain a banking licence this year. It recently appointed a ‘heavyweight’ board in order to strengthen its application, including Oliver Stocken CBE, who previously served on Standard Chartered Bank’s board; Mark Winlow, chairman of Lloyd’s insurance broker RFIB; and Victoria Raffé, who spent 20 years at the Financial Conduct Authority and its predecessor, the Financial Services Authority.
In addition, over the course of 2015 Ms Boden has assembled an experienced but diverse executive team, including hiring Mark Hipperson as chief technology officer. Mr Hipperson first led large-scale, complex IT delivery in his time as head of technology at Barclays corporate banking, introducing the world’s first internet banking experience to businesses, before leaving to found and then sell his own start-up business.
In its latest funding round in January, the bank secured a $70m investment from Harald McPike, a Bahamas-based quantitative trader and global private investor.
Ms Boden believes this will be an exciting year for Starling Bank. “We will be busy building the organisation and all the things that we will be delivering to customers,” she says. “Our time at the moment is spent talking to customers, listening to what they say and making sure we build a bank that exceeds the demands of customers today.”
