In the rapidly evolving world of finance, traditional banking institutions have embarked on a new challenge increasing competition in the market from a new breed of financial entities.
Known as challenger banks, these nimble, tech-savvy institutions have emerged as formidable players in the industry, leveraging advanced technology and innovative business models to offer customer-centric services.
The rise of challenger banks has been fuelled by a growing demand for more personalised, efficient and transparent banking solutions, especially among millennials and Gen Z consumers who seek more than just a bank – they seek a financial partner.
The success stories of these challenger banks have not only disrupted the financial sector, but have also sparked interest and discussions across various platforms and events globally. One significant event is Fintech Week London.
Technological Innovation at the Core
At the heart of this year’s event was a panel moderated by Dr. Leda Glyptis, a former banker and an influential figure in the fintech sector. Dr. Glyptis brought together a panel featuring Mariam Ogunbambi, Chief Client Officer at Engine by Starling, and Nike Shoge, Head of Commercial Growth at Starling Banking Services.
Starling Bank, founded by Anne Boden in 2014, has quickly risen to prominence as one of the leading challenger banks in the UK. Unlike traditional banks, which often rely on legacy systems and more tried-and-tested technology, Starling was built from the ground up with modern technology at its core.
The bank’s success can be attributed to its commitment to challenging the status quo and prioritising customer needs. Boden, with her extensive background in banking, recognised the flaws in the traditional banking model and set out to create a bank that would address these issues head-on.
Ogunbambi said: “When Anne first started as our founder, she was told to not do current accounts, as they don’t make any money, they’re loss making, but she had been in banking for 30 years and had seen that there was a lot that needed to change.
“There was no transparency, lots of hidden fees, and the customer experience and service wasn’t great. She wanted to change that.”
At the heart of Starling’s operations is its core banking system, developed entirely in-house. This system has provided the bank with unparalleled flexibility and control, enabling it to quickly respond to customer needs and market changes.
“ Our technology is really at the heart of everything that we do. We started off building our core banking system from scratch for Starling. Even though there were some services that we had to outsource, as we grew, we decided to build those technologies ourselves and bring them in-house,” Ogunbambi added.
“ For example, where we had a contact centre that was outsourced to a third party, we built our own contact centre, we had a card processor that was outsourced, we became our own card processor.
“Building that technology gives us more flexibility, it allows us to act rapidly to customer demands, changes, needs, and just gives us the control that we need to be able to provide the best service we can to our customers.”
In 2020, Starling spun off its technology platform into a separate entity known as Engine by Starling. This move was designed to leverage the technology infrastructure that had been so instrumental in Starling’s early success and offer it to other banks and financial institutions.
Engine provides a suite of banking-as-a-service solutions, enabling other organisations to benefit from Starling’s technological advancements, another example of how the bank is “going against the grain and going against the status quo”, as Ogunbambi described.
Customer-Centric Approach: Listening and Adapting
At the core of Starling Bank’s success is its unwavering commitment to a customer-centric approach. This philosophy is deeply embedded in the bank’s operations and is reflected in its ability to swiftly adapt to customer feedback and needs.
This was evidenced by Shoge, who told those in attendance about a time that a customer was experiencing abusive messages and the bank swung in to help her.
Shoge explained: “It was purely because the customer had put in a call to the call centre and mentioned an issue that they have about the technology. That would probably not have happened in a normal call centre, as it would have been lost and forgotten, but there is a feedback connected loop and the organisation is set up in that way.”
Starling’s ability to listen and respond to customer feedback is facilitated by its unique organisational structure, which fosters collaboration across departments. This approach ensures that customer insights are not only heard but acted upon, driving continuous improvement in the bank’s services.
Shoge said: “It’s a beehive of collaboration within Starling. We’re listening and we’re trying to see how we can help from a customised standpoint.”
The bank’s dedication to engineering and innovation has also played a significant role in its ability to meet customer needs effectively. By operating as “an engineering firm with a banking licence”, Starling has created a culture where technological excellence and customer satisfaction go hand in hand.
This adaptability and responsiveness to customer needs have been key to Starling’s growth and success. The bank’s ability to pivot and innovate based on customer feedback is a testament to its flexible and customer-focused approach, which Dr. Glyptis emphasised to the audience on multiple occasions.
“I think organisations that are successful are because they are malleable enough to really change and move with the requirements of the customers and what they want,” Shoge added.
Through this commitment to listening and adapting, Starling Bank has set a new standard for customer service in the banking industry, as is evident by being a Which? recommended bank for five straight years.
Future Outlook: New Leadership and Expansion Plans
Looking ahead, Starling Bank is poised for an exciting future with the appointment of new CEO Raman Bhatia, who is expected to bring fresh perspectives and drive further innovation.
Additionally, Engine by Starling aims to expand its reach and impact, with ambitions to grow as large and influential as the bank itself.
Ogunbambi concluded: “We will talk to banks across the globe and we’re growing the team. II think over the next few years, you’re going to see more of Engine as we grow and scale.”
