Guardian Article on Starling Profitability


#1

Interesting interview with @anne in The Guardian:

https://www.theguardian.com/careers/2018/jun/11/starling-bank-anne-boden-diversity-financial-crisis

Nice to read that Starling are expected to reach profitability by next year :slight_smile:


#2

I’m really amazed they are managing to break even only relying on a very fair overdraft policy and no fees at all.


#3

Don’t forget all the other services they now offer - including the services side…


#4

This is the beauty of not simply running the traditional banking model - making money from overdrafts, charges etc… With Starling’s business model of providing services to other business being a core revenue stream they are reducing any requirement to monetize their current account customers in order to be profitable thus allowing them to provide genuinely helpful financial products to current account holders.


#5

Being profitable is good, but Starling still has a long way to go to get the basics right.

The whole Starling isn’t just relying on selling bank accounts and selling its services, is going to eventually be a big selling point. It can remain profitable and still offer free banking.


#6

Personally I’m happy to pay for banking if the right benefits are packaged. There’s no reason I can see why Starling can’t do both free and paid banking, just like legacy banks. I really am loving the Starling experience so far. And I’m quite excited to see where it goes.


#7

I’m happy to pay for extra services, like insurances. Paying the £13 I pay to Nationwide to Starling instead. I also pay £25 to Revolut for the (business) currency accounts and forex at 0%.

I wouldn’t be fair to pay to have a better service, but paying for extras would be fine I believe.


#8

Completely agree. I’m sure it’s a given that customer experience would be the same regardless. But for things like Travel Insurance, European Breakdown Cover, Mobile Phone Cover, Emergency Home Cover, Airport Lounges etc, I’d be more than happy to pay just like we do already at NatWest. Perhaps Starling should run a poll nearer the time on desirable benefits for paid accounts. Or we could do one ourselves.


#9

The whole paid accounts is totally opposite to what Starling are wanting to do, they have said from day one that extras will be through the market place.

Obviously if they scrap the marketplace then there is a gap, but right now, I’m not so sure that travel insurance companies, phone insurance companies and so on, are even going to be interested in Starling if they offer a packaged account already.

Sort of defeats everything Starling is about.


#10

What if Starling enabled us to build our own package from products on the marketplace for a monthly fee? £25 for upto five benefits for example. Obviously this isn’t really relevant to what’s on the marketplace currently. But the chances are not everyone wants or uses the same benefits packaged with their legacy accounts. I mean the will writing service springs to mind.


#11

it’s up to the third party what they offer on the market… that’s the point.


#12

With the marketplace they are effectively offering that ability although it’s separated from the actual current account. You simply pick and choose the extra services you’d like from the marketplace at the cost that suits you. As the marketplace develops this should become more attractive. Having said that I’m more than happy to pay for additional/improved service such as a personal account manager etc.


#13

My point is that there will be many Starling customers that haven’t switched banks completely, and retain their accounts with legacy banks because they wish to hold onto their packaged benefits. The products currently available in the marketplace do not offer a like for like alternative. Surely Starlings long term aim is not just to have more customers on their books, but to entice customers away from their existing banks and close their old accounts. Otherwise there is over capacity in the market.


#14

@BoutTime I have kept my Nationwide account open for this very reason. Just looking at the family mobile phone insurance, no-one else comes close at the level of cover and price. All the phones in the house covered for £13! Even without the travel insurance and breakdown cover it’s a bargain :slight_smile:

If there was a like-for-like alternative in the Marketplace I’d switch today but I very much doubt anyone will be able to beat Nationwide’s offer.


#15

@danmullen this is exactly what I mean. We have airport lounge access, mobile phone cover, holiday insurance, home emergency insurance, European Breakdown cover. All on a joint account to share the benefits. We can’t give that up.


#16

Surely to Starling it really doesn’t matter how many bank accounts customers have it’s more relevant to them how active their customers are?!


#17

And HOW they are active, i.e. POS transactions earn interchange fees yet ATM transactions cost Starling money every time.


#18

Of course it matters. Why would any business want to share it’s customers? The way things stand I will keep all of my NatWest accounts and pay all of my bills from one of them to get the cashback. I will pay for our packaged Black account to get all of the benefits. If Starling could offer the same then I would switch and close my accounts elsewhere. But they don’t so I can’t. That means I will us Starling as a spending account only, and they will not hold all of my money. Not that I have a lot mind you but there will be customers that do. Competition is good for customers, not necessarily for businesses. Im sure if you asked Starling whether they’d rather have all of your custom or just some of it they’d say the former.


#19

They probably would like to just receive your salary and have you use your card in shops but have ATM withdrawals and cash deposits via another account


#20

:joy::joy::joy:

making this a valid body