Starling Bank has no plans to enter the “massively overserved” US retail banking market, but will focus its US expansion on its business-to-business offering instead, says its chief financial officer.
The UK challenger bank is looking to establish itself in the US, to diversify and grow its revenues, and is looking at buying a US bank to secure a national US banking licence.
Speaking to the Banker, Starling CFO Declan Ferguson said the challenger bank had no plans to expand Starling’s retail offering in the US, which he described as a “massively overserved” market.
Ferguson said: “The opportunity for a UK retail bank to be successful there is limited . . . I can’t see what the unique selling point is."
Ferguson said that Starling, which has nearly five million retail customers, would not be applying for a US banking licence but would undertake a “more modest acquisition”.
It hopes to establish itself in the US within the next two years, the CFO said.
Instead of launching its retail bank stateside, Starling is focusing its efforts on exporting its B2B offering Engine.
Starling launched Engine as a subsidiary in 2022, as the challenger bank U-turned on its global strategy.
Engine sells itself as a “cloud native, complete banking platform”.
Clients can leverage its software to build and enhance services such as digital onboarding and savings accounts.
Engine has set up a Delaware subsidiary and has appointed former McKinsey partner Jody Bhagat, to head up its multi-million-dollar US assault from its New York office.
Last year, Engine, which employs around 300 people, landed its biggest client to date, Tangerine Bank, which is a subsidiary of Canada’s Scotiabank.
Earlier this year, Monzo said it was exiting the US market while British rival Revolut has applied for a US national bank licence.
Would you like to write the first comment?
Login to post comments