Starling raises $70m for UK banking market push
By Emma Dunkley for ft.com
Starling Bank has recruited a former regulator and a number of industry heavyweights for its board while raising $70m to spearhead its attempt to move into the UK banking market.
The new digital bank, founded by Anne Boden, the former chief operating officer of Allied Irish Bank, is aiming to lure mobile-focused customers and provide a superior current account service to those offered by the incumbent high street banks.
The emergence of Starling follows in the footsteps of Atom Bank and Tandem, two digitally-based challengers that received regulatory approval for launch last year, and heralds a new generation of tech-savvy banks.
They are among a host of new lenders trying to break into a market not only dominated by four big names in Lloyds, Barclays, HSBC and Royal Bank of Scotland, but also one with longstanding customer apathy to switching accounts.
Investors are drawn to new challengers for their high growth prospects and their freedom from the burden of old systems. Starling has secured $70m of investment from Harald McPike, the founder of QuantRes, a Bahamas-based quantitative investment manager.
“Starling Bank will provide people with the kind of innovative leaps in their financial lives that they have experienced in transportation and video streaming, so this is an investment opportunity I could not pass up,” he said.
Starling, which is awaiting regulatory approval to launch, revealed on Monday that it has appointed Oliver Stocken, who previously served as a non-executive director of Standard Chartered, as chairman.
Victoria Raffé, Marcus Traill and Craig Mawdsley are joining as non-executive directors, alongside Mark Winlow and Steve Colsell, who were appointed earlier in 2015.
Ms Raffé spent two decades at the Financial Conduct Authority, after holding a number of senior positions at Fidelity, Prudential and KPMG. Her final role was as director of authorisations and left in a shake-up a year ago.
Mr Traill has held a number of senior positions at QuantRes, alongside Mr Mawdsley. Mr Colsell has served as chief financial officer within divisions of Lloyds Banking Group.
Ms Boden said: “Our aim is clear — to bring about a revolution in retail banking, by developing an account architecture, using the latest available technology, designed to meet the needs of the modern customer.”
The emergence of digitally-focused new banks comes as the traditional high street lenders, grappling with their complex legacy infrastructure, continue to be plagued by IT glitches. Last week, HSBC suffered a two-day online banking outage, while mobile banking services were also hit.
the article first appeared in Financial times