Starling Bank SWOT and PESTLE Analysis

Strength

1. Innovative banking with first mover advantage: Starling - the best British Bank 2019 is 100% mobile with no branches, no fees and most importantly no paperwork, the account is up and running within 20 minutes. This digital, mobile-only challenger bank based in the UK, employs modernized technology and advanced processing to bring banking into the present to complement today’s fast paced lifestyle and respect customer’s changing needs. Starling’s goal is to help customer’s make the right decisions for both their current expenditure and future saving. Besides the account holders are provided a contact-less bank card delivered within a week. Also, with the Starling banking app customers get instant notifications when they spend or receive payments as part of real time banking alongside insights that illuminate spending patterns, no fees overseas, 24x7 customer support and an application that only takes minutes. Starling offers everything under one roof – customers can connect to smart financial products and design their own in-app money hub with Starling’s ever-growing financial Marketplace.

2. Clinched several awards and accolades: Starling has won several awards in the past 2 years. It won “Best British Bank” and Best Current Account 2019 at Smart Money People’s 2018 British Bank Awards and was voted as the “Best Business Banking Provider 2019”. Starling also clinched the Best Use of Mobile at the FSTech Awards and adorned the Hottest Fintech startup jewel at The Europas awards. In 2018, Starling also bagged the award for B2B Payments Innovation of the Year at the Payment Awards.

3. Accelerated growth momentum: Starling’s growth pace has been phenomenal: Starling has gained more than 30,000 SME business-account sign-ups, adding to around 500,000 consumer current accounts in a little less than a year’s timeframe which is quite commendable. In November 2017at the heels of the financial year, Starling housed 43,000 personal current accounts. Nine months later, they have opened over 210,000 current accounts – hiking the market capture by almost five times. This momentous growth is marked by the high engagement of their customers, with 60% of them using their account every month. With an average amount of around £900 in each of these accounts, Starling is ahead of its peers. The slice of these customers cutting monthly direct debits has more than doubled year-on-year. Similarly, the proportion of Faster Payments made by these customers has almost tripled over the same time window. Since November, Starling processed over £1 billion customer transactions and monthly transaction volumes cross the £200 million a month mark. Deposits have increased exponentially and currently stand at more than £100 million.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. Open banking regulations in UK and Europe: New challengers within the industry are benefitting from the recent regulatory changes made in the UK as well as from EU’s Revised Payments Services Directive (PSD2) that come into effect from 2018. These and open banking give third parties full access to customers’ current account data when requested. This translates to fintechs getting a chance to create new services by accessing traditional bank data. Due to this, the industry will be seeing a spike in competition as banks will find themselves forced to share customers with the new entrants of the industry.

2. General Data Protection Regulation in Europe: Privacy and data ownership policies in Europe are likely to get completely rewritten due to the General Data Protection Regulation (GDPR) that offers data protection to EU citizens on an entirely new level. The ways by which financial companies and consumers’ data gets shared with IoT devices will also see an overhaul. Starling, a challenger bank, has to thus obligatorily protect customer data and also comply with all GDPR regulations. GDPR compliance is also beneficial for the bank as it promotes customer engagement and trust. With this in mind, Starling Bank is in the process of developing a section within its app which will give its customers access to all their data with a single click.

Environmental

1. Focus on environmental sustainability to increase customer loyalty: Customer and employee loyalty as well as sales get positively affected by actions that are socially and environmentally positive. A study conducted by Cone Communications has shown that millennial are environmentally conscious and prefer businesses that can assist them in resolving social and environmental problems. Starling has an advantage here as it has a far smaller carbon footprint compared to other banks, owing to its digital nature. All account related processes are also much faster and paperless. Further paper saving is achieved b not posting paper statements each month. Also, all packaging used by the bank for its portrait debit cards is also recyclable, making the bank extremely environmentally friendly.