Incumbent banking giants are combatting the rising threat of challenger banks by striking unfair partnerships that have left FinTech challengers ‘sucked dry’, according to Starling Bank chief executive and founder Anne Boden.

Speaking on a panel discussion at the Money20/20 conference in Amsterdam, she launched an attack on the approach big banks have taken in order to replicate the technology, platforms and working culture of nimble challengers, and accused bosses of “playing startup safari” before “using” the smaller organisations for information.

Asked about the disruption being driven by FinTech challengers such as Starling, Monzo and Revolut, Boden explained: “I think anybody now realises that the new banks, the digital new generation banks, are actually taking huge market share, and that’s why the big banks are taking the concept of launching their own brands very, very seriously.”

However, Boden highlighted that since founding Starling in 2014, she has received a steady stream of requests from senior banking figures asking to spend time at her London office to absorb the culture and working model of a challenger bank.

“If you’re a big bank, you have the opportunity of playing startup safari,” she said, “so we in the new bank FinTech sector get emails on a daily basis [saying] can we bring our CEO round to see you this afternoon, he’s in town, can we bring them around and show them what a new bank looks like.”

Last year, Starling Bank was reported to have been co-opted by RBS to help launch its standalone digital banking app Bo.

Whilst such collaboration can be mutually beneficial, Boden warned those larger banks who treat their FinTech partners as direct competition, and called for fairer treatment for the less well-resourced challengers.

“What we have at the moment is the boards of the large institutions suddenly realising that this thing is real, the new banks are taking market share, they’re doing things that have never been done before and they’re having to take it seriously,” she said.

“What they are doing is taking a little piece of the action. Using it to learn, but in many cases what’s actually happening is these smaller organisations, especially in the pre-paid space, are being used for information - and being sucked dry and then when all of the information is out of them, they’re left out,” she commented.

Boden stated: "We’ve gone through five years so we’re now in a different space, but my heart goes out to lots of those small institutions, those small pre-paid organisations, the small FinTechs that are being used by these large institutions and it is really, really unfair.”

Responding to Boden’s criticism of incumbents, fellow panellist, Claire Calmjane, group chief innovation officer at Societe Generale, said: “I’ve always looked at fair partnerships when in a startup we are engaging to make sure they get paid for proof of concept and they don’t do it for free and what I see, in my company they definitely embrace it and we don’t consider startups as being competitors, we consider that all of industry has to be transformed, that in five to 10 years it will be completely different in Europe.”

Calmjane added: “We have to embrace this new business model of Open Banking and develop artificial intelligence competencies because if we don’t do it other people will come and we will not be there.”

Boden said the perceived threat of the more technologically enabled FinTechs was radically changing the banking landscape, but added the time had now come when established FinTechs are maturing and consolidating their position in the market, prompting a need for a more democratic sharing of resources, knowledge and technology in FinTech partnerships with larger banks.

“Now you’ve got platforms and marketplaces where people are engaging in a different sort of way, where there’s much more fairness, where it’s based on the API economy,” she explained. “The former world, the ‘let’s get together and have beers with some some FinTechs and perhaps something will rub off', has passed its sell by date,” she insisted.

“I think we need to move on from that, to platforms to far more equal relationship, where the technology’s on both sides and the contractual relationships are much fairer.”

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