Starling Bank will today unveil four new partners for its in-app marketplace, raising the prospect of customers buying insurance and even gaining a mortgage through the bank's app within weeks.
The digital-only bank will launch an integration with Pensionbee in its app from today, with digital investing service Wealthsimple, mortgage broker Habito and Kasko travel insurance to come in the next few weeks, the bank said.
They are the first in a planned 25 partnerships with third-party financial services providers over the course of this year.
Megan Caywood, Starling’s chief platform officer, told City A.M. the bank is “going to have a mix” of large, household-name institutions and smaller providers by the end of the year. Talks are ongoing with insurers, asset managers and savings and investment providers, Caywood said.
Starling is making an aggressive push to a marketplace model which aims to make its app the centre of customers’ financial lives as well as opening up new revenue sources as the bank pushes to become profitable. Starling’s chief executive, Anne Boden, previously told City A.M. the bank will be in the black by the end of 2019.
The bank will take a commission from every customer referred to other apps through its marketplace, although Caywood said fees for earlier partners will be “very very low”. Starling eventually hopes to be able to offer a standardised fee for any financial services provider.
Starling is also working with charity apps such as Sustainably and Donate Your Change to allow people to “round up” their spending into donations to charity, in a similar way to savings firm Moneybox, which already integrates with the bank. Charity apps will not be charged fees, Caywood said.
It has pushed to gain a first-mover advantage as open banking promises to expose the dominant British banks to competition from fintech firms by compelling them to share data, if customers consent.
The bank has already seen “really high percentages” of customers sign up for earlier marketplace offerings like the Flux loyalty card scheme, although it declined to give any indication of overall customer numbers or growth.
While many industry observers expect open banking to shake up British retail banking, it has provided little in the way of change a month after coming into force.
None of the major banks which together hold the large majority of UK current accounts contacted by City A.M. have rolled out connections with third-party service providers, with the exception of Lloyds’s partnership with Yolt, a budgeting app.
Starling is aiming to follow a different business model to the dominant high street banks, which rely on cross-selling higher-margin products after providing loss-leading current accounts.
The model will also allow Starling to offer a broader range of products at a rapid pace, without having to spread its resources across multiple products.
“We know we can’t serve all of the products,” Caywood said. “It’s difficult to try to be everything to everyone.”