Starling to launch credit card and Euro account

Starling Bank is to launch a credit card service and a new euro account for UK customers in 2019.

In a new year’s message, the challenger bank’s chief executive Anne Boden said she expects the lender to hit one million customers in the course of the next 12 months.

She said the bank, founded in 2014 and launched in 2017, has seen customer numbers surge from 50,000 to more than 400,000 in 2018, with headcount expanding from 130 to 300.

Her message explained that the bank would be extending a credit card and expanding its lending services to customers over the course of the year, as it looks to head off competition rom digital banking rivals such as Monzo, N26 and Tandem, who have announced plans to diversify their product offerings with new money management and credit facilities.

The first new product to launch will be a Euro account for UK residents, which currently has 3,500 customers on the waiting list. The account is currently in beta testing phase with members of staff trialling its features.

Boden added that the mix of revenue streams from their retail, business banking, payments and marketplace business would combine to create a sustainable business model that she expected to “be profitable by 2020”.

Starling is also putting in place Brexit contingency plans, as the government continues to step up no-deal preparations, and as part of its long-term plan will establish an Irish a subsidiary with a view to targeting the French and German markets.

The plans for a new range of banking services follow rapid growth for the challenger bank, which last year announced a partnership with the Post Office, enabling customers to deposit and withdraw cash at 11,500 branches.

Boden also highlighted the launch of business banking services for companies and sole traders, along with the opening up of its in-app market place, which connects customers to third party financial services apps through a range of Open Banking APIs.

Boden touched upon industry recognition for its products, including being named personal finance app of the year at the 2018 Payment Awards.

“As our growth accelerates, and as we have graduated from fintech start-up to being a fully-fledged bank and tech company, our horizons are expanding,” she stated. “Today’s consumers have grown used to a world of digital services that are crafted around their particular needs, providing them with input before, during and after they buy that car or search for that loan.”

Boden explained that the bank is exploring the potential for machine learning technology in turning financial data into insights which help consumers in their financial decision making and suggested that “further developments” were in the pipeline, but she also stressed that the bank would “never sell this data to outsiders; instead we’ll feed it back to our customers for their own benefit”.

Referencing the trend for digital transformation which has seen incumbent banking giants such as RBS and Lloyds to invest in digital banking platforms and mobile banking services, Boden described their attempts to emulate the consumer-friendly interface as flattering.

However, she said that underneath the “old banks” remain unchanged, and accused them of “clinging on to outmoded practices and changing hefty fees for unarranged overdrafts, declined transactions and international transfers”.

Boden added: “They [incumbent banks] have branch networks and outmoded IT systems to maintain. And they’re having to spend billions on their digital transformations and IT migrations - on occasion with disastrous results.”

Last month Megan Caywood, Starling's chief platform officer, confirmed that she is moving to Barclays Bank at the start of this year as head of consumer strategy.

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