Finance
Starling says there are no plans to pursue an EU banking license, focus on Engine
Raman Bhatia, new CEO of Starling. Bhatia joined from OVO Energy Ltd., where he was CEO
Zed Jameson | Bloomberg | Getty Images
AMSTERDAM – Digital bank Starling will not reapply for a European Union banking license and will instead pursue international expansion through its software business, its incoming CEO said, in an approach to overseas growth that differs from that of some of its rivals.
Starling is one of Britain’s so-called ‘neobanks’ – digital-only banks that typically have no branches. It started in 2014, has reached 4 million customers and was last officially valued at £2.5 billion ($3.2 billion).
The digital bank, which is supported by Goldman Sachs, traditionally offers banking services such as checking accounts and, more recently, lending. Starling’s customers are mainly located in Great Britain. The company sought to expand abroad by applying for an Irish banking license, which would have given the bank access to the European Union market. Starling withdrew that application in 2022.
Raman Bhatia outlined the company’s international expansion plans on Wednesday in his first public comments since being appointed CEO in March, succeeding founder Anne Boden.
Bhatia said the company has no plans to reapply for a European banking license to enter new countries. Instead, the international expansion will be powered by Engine, a software platform that Starling sells to other companies so they can set up their own digital banks.
“I am very optimistic about this approach around internationalizing what is best about Starling, the proprietary technology versus market by market, idiosyncratic regulatory regime, capital requirements and building trust and brand extension, which has not been proven for any scheme,” said Bhatia. during a fireside chat at the Money 2020 conference, moderated by CNBC.
He described the opportunities in countries such as Thailand and the Middle East as ‘immense’.
Engine is a unique model among neobanks, which tend to delve into consumer-facing apps and services. Starling is betting it can sell the technology to other banks.
Salt Bank in Romania and AMP in Australia are Starling’s first Engine customers.
Bhatia said he would like to see a “doubling down” on the Engine strategy and gain market share in the enterprise software space.
