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Smartphone-based UK bank gets additional £48m backing

Starling bank, which only offers a smartphone-based current account, has received multi-million pound backing and named its board of directors

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Starling bank has received $70m (£48m) investment and named its board of directors as its smartphone-based current account seeks regulatory approval from the Prudential Regulation Authority.

The bank – the brainchild of Anne Boden, an IT professional who has spent much of her working life at some of the world’s biggest banks – is one of a growing group of challenger banks in the UK. 

Planning to launch in 2016, Starling will only offer a current account based on customers’ smartphones.

The latest backing of $70m comes from global private investor Harald McPike.

Speaking about McPike, Boden said: “It was important to us to have an investor with not just the financial strength but who also shared our ambition of empowering people with meaningful insight into their own financial information.

“With his background in algorithmic trading, risk management and technology, Harald sees the significant potential of technology in the retail banking sector.”

Starling to lead the retail banking transformation

Starling has also named its board of directors, with Oliver Stocken taking the role of chairman. Stocken said: “It is a fascinating time for retail banking in the UK, with Starling at the forefront of a new generation of banks. I was attracted by the unwavering focus of Anne and the team, bringing clear thinking on how to transform the retail banking experience.”

The bank’s proposition is simple: It only offers a current account, used via smartphones, and is using the latest mobile and data technologies to support digital lifestyles. The bank will leave customers to decide what other financial products they want to use and enable them to access third-party financial services through apps.

Boden is an IT professional who got into banking: Armed with a BSc in computer science and chemistry, and an MBA, the fellow of the Chartered Institute of IT joined Lloyds Bank in the early 1980s.

After Lloyds Bank her career has included: A period heading up UK IT at Standard Chartered; being one of the original designers of the Clearing House Automated Payments System (Chaps); a role as a strategy and technology consultant at PricewaterhouseCoopers (PwC); restructuring European operations at UBS; holding the global CIO for reinsurance at Aon; and running business in 34 countries for ABN Amro and subsequently RBS, when it took over the Dutch bank.

But it was after leaving RBS in 2011 – to spend time working with startups to find out what was going on in financial services outside the big organisations – that she realised how banks needed to change.

Starling plans to use best of breed components to make up its banking system. 

From day one the bank will have: Payment, card processing and risk systems; general ledgers, a ledger system for current accounts, security systems and state-of-the-art apps – and all of these will be in a private cloud. Its infrastructure will use software-as-a-service (SaaS) tools and it will buy bespoke functionality and build functionality in-house.

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