Starling Bank, the British digital lender known for its profitable growth and proprietary technology, is reportedly plotting a major push into the US.
According to multiple reports, the bank is exploring both the acquisition of a US-based lender and the possibility of applying for a national banking licence; moves that, if realised, would set Starling apart from its UK challenger peers and test the viability of exporting a full-stack banking model abroad.
The potential expansion was first reported by Sifted, citing sources familiar with Starling’s plans. The bank is said to be eyeing a regional bank with around $2 billion in assets, particularly one with legacy IT infrastructure that could be migrated onto Starling’s own core banking platform, Engine.
The company has already established a Delaware-based subsidiary and has been hiring in the US, suggesting the plan is more than speculative.
Starling’s chief executive, John Mountain, has not publicly confirmed the specifics of the expansion, but in earlier statements to American Banker, he indicated that Starling would look to scale its core banking platform internationally before considering any consumer-facing products.
“If there’s an opportunity to do something more substantive in the US, we would take it,” he said in November 2023.
A new route for UK fintechs?
The move signals a markedly different strategy to that of Starling’s closest UK rivals. Monzo famously withdrew its US banking licence application in 2021 after reportedly facing regulatory hurdles, while Revolut continues to operate in the US through a partnership with Metropolitan Commercial Bank.
Neither firm has secured a full US banking licence.
In contrast, Starling appears to be targeting deeper integration with the US financial system. A full banking licence would allow it to hold deposits, make loans, and operate without relying on third-party institutions. This model is more familiar to US regulators and potentially more resilient in the long term.
The bank’s proprietary tech platform, Engine, would be key to this strategy. Already live with banking clients in Romania and Australia, Engine allows other financial institutions to operate with the same infrastructure Starling uses in the UK. By acquiring a US bank and migrating it onto Engine, Starling could demonstrate the commercial viability of its software in one of the world’s most competitive markets.
Market opportunity—and exposure
The US remains the world’s largest banking market, with over 4,000 institutions ranging from national giants to local credit unions. Many smaller banks are burdened by outdated technology, which Starling sees as an opportunity.
The company’s focus appears to be on East Coast institutions, particularly in states like New York, where regulatory pathways are clearer and the customer base more digitally inclined. Reports suggest Starling is seeking an institution with “low-tech infrastructure” that could be modernised.
Yet the risks are substantial. US regulators have historically been cautious about granting licences to foreign fintechs, and integration of an acquired bank could pose cultural and operational challenges. Starling would also face fierce competition from entrenched incumbents and a new crop of domestic fintechs, including SoFi, Chime and Varo.
There are also questions about branding. Starling has strong name recognition in the UK but is largely unknown in the US. Without a unique selling proposition or large marketing budget, consumer adoption could be slow, particularly in a market saturated with digital-first banking options.
Core banking competition
Perhaps the most significant implications of Starling’s move lie in the core banking space. If Engine can successfully replatform a US bank, it would pose a credible challenge to legacy providers like FIS, Fiserv and Jack Henry, as well as newer entrants such as Mambu and Thought Machine.
In a comment to American Banker, Engine CEO Sam Everington confirmed that several US banks had already expressed interest in the platform. “We’re focused on the mid-size and community bank segment,” he said, noting that many such institutions are seeking modern solutions without the overhead of bespoke software development.
The model has precedent: German fintech Solaris and Swedish-based Intergiro have offered core banking as a service across Europe. But few have made inroads into the US market at scale. If successful, Starling could prove that a licensed bank operating its own tech stack has a meaningful edge over API-driven competitors.
