RBS enlists Starling for digital standalone bank
Written by Hannah McGrath
Royal Bank of Scotland (RBS) has joined up with challenger bank Starling to help it with plans for a standalone digital bank.
According to a shareholder letter sent by Anne Boden, chief executive of Starling, which was detailed in the Sunday Times newspaper and confirmed to FStech, Starling has signed “a contract to provide payment services to support new initiatives at RBS/NatWest”.
The deal with the app-based bank is understood to involve assisting RBS with ongoing development of a new digital platform through use of its infrastructure.
The amount RBS will pay Starling has not been disclosed, but Starling will benefit from efficiencies of scale, according to the report in The Sunday Times.
The investor update sent out this week also revealed that 210,000 current accounts have been opened by customers, a significant increase on the 43,000 opened at the close of the financial year in 2017, with an average deposit of £900.
This compares to the 500,000 new users Monzo reported since opening its current account service since October last year.
Starling bank also announced that around 10,000 customers have opened business accounts since it launched the service in March this year.
Starling, which reported a pre-tax loss of £11.6million in the year to November, is also reportedly ready to apply for a grant from the RBS remedies fund, which has a maximum grant value of £120 million.
A spokesperson for Starling Bank declined to comment, but confirmed the details of the investor update published in the Sunday Times.
In March this year, it was reported that Mark Bailie, former chief operating officer at RBS, was leading the bank’s efforts to set up a standalone digital bank, having already signed agreements with FinTech firms including Funding Circle.
RBS declined to comment.