All posts in “starling bank”

Starling’s Chief Platform Officer Megan Caywood has been recruited by Barclays

They say imitation is the highest form of flattery, but in the increasingly competitive world of banking, perhaps poaching your best people also counts. In a move that is bound to raise eyebrows in London’s fintech ecosystem and beyond, Megan Caywood, who up until this week was Starling Bank’s Chief Platform Officer, is joining banking incumbent Barclays.

According to sources, Caywood, who led Starling’s marketplace banking efforts — a key pillar of the challenger bank — handed in her notice two weeks ago, whilst Starling Marketplace partners were informed last week. I understand she is currently on “gardening leave” and will officially become Managing Director, Head of Barclays Consumer Strategy early next year.

With an academic background in cognitive science research, and a Silicon Valley import — having worked at Xero and Intuit in the U.S.) — Caywood joined Starling in June 2016 where she soon became an important lieutenant to Starling CEO and founder Anne Boden, often appearing publicly as the second face of the challenger bank. I understand, however, that the pair remain good friends and that Starling threw a leaving party for Caywood last week.

Megan Caywood speaking at a Startup Grind event in London moderated by TechCrunch’s Steve O’Hear

Meanwhile, the move to Barclays is thought to be primarily motivated by the impact Caywood believes she can have at a large bank compared to an upstart, according to a source familiar with her thinking. Caywood has always talked passionately about making financial services work better for consumers and has long-argued that banks working with fintech startups is the best way to achieve this.

Related to this, Caywood’s new title at Barclays makes no reference to marketplaces, even though my fintech sources tell me Barclays is rumoured to be working on deeper third-party integrations. As a pointer, the incumbent bank has a number of existing partnerships, including working with London startup Flux to offer itemised digital receipts and loyalty within its Launchpad app.

It also noteworthy that it doesn’t include ‘UK’, and I understand that her remit is going to be international, perhaps expanding across the pond based on her Silicon Valley roots and the fact that she is American.

During her two and a half years at Starling, Caywood helped design and rapidly roll out the Starling Marketplace, which includes an open API and a marketplace of third-party financial services that sit inside of the Starling app. Marketplace partners include Flux, mortgage broker Habito, travel insurance provider Kasko, and investment products Wealthify and Wealthsimple, amongst others.

I’ve reached out to Caywood, who declined to comment, instead referring me to Barclays’ PR.

Starling Bank raising another £80M, ends partnership with TransferWise

Starling, the U.K. challenger bank founded by banking veteran Anne Boden, is in the early stages of raising a significant new funding round as part of plans to double down on its newly launched business current account, TechCrunch has learned.

According to a person familiar with the matter, Starling is looking to raise around £80 million in additional capital from new investors. To assist in the process, the company is hiring a new international advisory firm, pointing to an investor search that potentially goes beyond the U.K. and could include large international institutional investors. Up until now, Starling has been funded to the tune of £48 million by hedge fund manager Harald McPike, who, as a result, owns more than 50 per cent of the venture.

The need for Starling to increase its capital is thought to be related to the bank’s bid to be one of the recipients of the Capability and Innovation fund, which was set up by Royal Bank of Scotland to fulfill European state aid conditions arising from the bank’s £45 billion U.K. government bailout during the financial crisis. The fund will be split into different grants to help “challenger banks and other financial services providers” diversify and develop their business current account offerings for small and medium-sized enterprises.

Thought to be up against incumbents Santander, Metro Bank, Clydesdale Bank, and TSB, Starling is looking well-placed to win the £120 million “Pool A” grant, which is being decided by an independent panel — not least if the fund is to meet its remit of genuinely increasing competition within SME banking. (Starling’s Boden has been quite outspoken on the matter.)

Starling and TransferWise integration as it might have looked

Related to this, Starling is busy recruiting a “double-digit” team for its SME banking unit. I understand from sources that executive search consultants have been engaged to work on senior hires and that this will include a new head of SME banking.

Meanwhile, Starling recently launched international payments within its consumer-facing current account, news it published on its blog and that was picked up in the fintech media. However, less well reported it that the bank has quietly dropped its previously announced partnership with fintech unicorn TransferWise.

Back in March 2017, the two companies issued a joint press release detailing the partnership that would have given Starling customers “direct, in-app access” to TransferWise’s international money transfer service. The functionality was due to launch the following summer but never materialised (something that seemingly went unnoticed by most outlets). Now I understand the partnership has dissolved entirely as Starling has chosen to go it alone.

Asked what happened, TransferWise’s Head of Business, Stuart Gregory, issued the following statement:

“TransferWise is working with many banks to transform international payments for their customers, with more to come in the near future. In this instance Starling have chosen another route but it’s fantastic to see they’ve kept the price transparency of the real exchange rate and clear separate fees.”

Likewise, Starling’s Boden told TechCrunch:

“Our partnership with TransferWise was always about meeting customer demands. As we developed out our payments business it became clear to us that integrating with a third party payments provider in the Starling Marketplace didn’t offer the best customer experience. We figured that we could provide a better user experience by doing it ourselves. As you know, Starling is all about customer service”.

Of course it’s never a good look when two companies announce with fanfare a major partnership that delivers nothing but vapourware — Starling were still briefing that it was working with TransferWise in late 2017 — even if it is perfectly reasonable for an upstart bank to switch strategy as the broader competitive climate changes. In this instance, since the original announcement, Starling has made significant headway on its own Starling Payments business, and TransferWise launched its own “borderless” banking product and debit card. Perhaps this is simply the case that partnering whilst increasing feature parity doesn’t always make for happy bedfellows.

Starling’s marketplace banking rollout adds pensions, savings, travel insurance and mortgages

Starling, the U.K. challenger bank that offers a mobile-only current account, continues to execute on its marketplace banking strategy. Following the required regulatory approval, the Starling Marketplace is adding a number of financial services integrations, spanning pensions, savings, travel insurance and mortgage brokerage.

Specifically, Starling is partnering with PensionBee, Wealthsimple, Kasko, and Habito, respectively. It says it’s targeting 25 partnerships in total in 2018. The challenger bank has already added Flux to its in-app marketplace to offer item-level receipts and loyalty from Flux partner merchants.

The addition of financial services speaks to Starling Bank’s broader “marketplace banking” vision: the idea that your bank will provide you with access to a choice of third-party money-related apps and services. It’s also more evidence that the battle between banks and fintechs isn’t a zero sum game. Partnerships are being forged at a rapid pace, either formally or simply through open APIs mandated by Open Banking/PSD2 legislation.

In fact, at a recent event I hosted, Starling’s Chief Platorm Officer Megan Caywood also made the point that the challenger banks and wider fintech startup ecosystem are in many ways on the same side. Fintechs run on existing banking rails and whose better banking rails to run on than the forward-thinking and API-friendly challenger banks, rather than incumbents.

Meanwhile, the Starling Marketplace strategy is to partner far and wide to create a network effect on both sides of its market where the app becomes more useful the more users and partners/integrations it adds. The addition of a first group of financial services covering core banking needs other than a current account begins to flesh this out a little.

With that said, Starling isn’t disclosing customer numbers, while the integration with PensionBee, Wealthsimple, Kasko, and Habito is being rolled out in two stages.

Version one sees each provider visible in the Starling Marketplace in the Starling app. If you are also an existing user of the partner app (e.g. an existing PensionBee user) then you can connect the partner to Starling, so you have the widget in the Starling app to see high level detail (e.g. Total Balance of pension). If you are a new user, you’ll be re-directed to the partner app and, once you’ve signed up, you’ll be asked if you are happy to share your data with Starling so that it shows up in the Starling Marketplace as a widget.

Version two, coming later in Q1, will see partner providers use the Starling API to help new users set up accounts (similar to Facebook type login but using your Starling credentials). The widget in the Marketplace will also gain functionality. In addition to showing high level data (e.g Total Balance), you’ll be able to take a number of simple actions like adding money to your pension or making a claim on your travel insurance, all within the Starling Marketplace.

“Those features will come later this year, as we also expand the ‘widgets’ to show a bit more detailed data as well,” Caywood tells me.

And in case you’re wondering, Starling will generate affiliate revenue per each of these partners, while I’m told this will be shown in the Starling Marketplace per partner so that customers are always made aware.

Adds Caywood in a statement:

“The expansion of our Marketplace is a huge milestone for Starling as we continue to give our customers control of their money like never before. We are building a banking experience fit for the 21st Century, where the best financial products are available securely in one place.

Last year, we launched our full set of Open APIs, and enabled integrations with companies like Moneybox, Yoyo Wallet, Yolt, Tail, and Flux. Now we’re excited to take that to the next level by integrating financial services providers into the Starling Marketplace.”

Mobile payment and loyalty platform Yoyo Wallet integrates with Starling Bank

In another example of Starling Bank jumping on the Open Banking/PSD2 train before legislation in the U.K. and Europe next year will force banks to do so, it is launching its latest API partnership: this time with Yoyo Wallet, the U.K.-based mobile payment and loyalty platform.

The new integration sees Yoyo use Starling’s Open Banking-compliant API to let you link your Starling bank account to your Yoyo Wallet so that whenever you pay at one of Yoyo’s retail partners using your Starling Bank card, you automatically collect any loyalty points on offer. This means that you don’t have to remember to pay using the Yoyo app (or, presumably, a retailer’s white labelled version), which otherwise requires opening the app and scanning a bar code.

Here’s how it works: To begin linking your Starling account to your Yoyo account, you open the Yoyo app and are asked to scan your Starling card using your phone’s camera, like you ordinarily do to add any card as a payment option to Yoyo Wallet. However, in this instance, Yoyo will recognise you bank with Starling and ask to you to authenticate with Starling and grant it permission to access certain data from your Starling account.

Once you’ve done so, any time you use your Starling card at Yoyo-accepting high street merchants, you instantly earn retailer-specific loyalty points, which can be exchanged for rewards, discounts and offers. Yoyo’s retailer partnerships include high street chains such as Planet Organic, Fernandez & Wells, Wrap It Up and HOP Vietnamese.

More broadly, this speaks to Starling Bank’s “marketplace banking” vision: the idea that your bank will provide you with access to a choice of third-party money-related apps and services. However, for now at least, Yoyo is simply making use of the Starling API and the partnership doesn’t see Yoyo Wallet listed in the Starling Marketplace portion of the Starling Bank app (although I’m told this is coming) and Yoyo Wallet’s item level receipt data doesn’t show up in the Starling Bank app, either.

This makes it a much less deep integration than Starling’s recent partnership with Flux, which also offers item level digital receipts and soon retail loyalty programs. That could change, of course, and I wouldn’t be surprised to see Yoyo more deeply integrate with Starling at a future date. After all, Starling’s marketplace banking strategy is to partner far and wide to create a network effect on both sides of its market where the app becomes more useful the more users and partners/integrations it adds.

Along with Flux, and now Yoyo Wallet, it has also integrated to varying degrees with offers platform Tail and savings app Moneybox. Meanwhile, a partnership with TransferWise was announced in March but has yet to see the light of day.

UK’s digital-only Starling Bank adds Apple Pay support

Digital-only UK “challenger” bank, Starling Bank, has added support for Apple Pay — meaning its customers can now add their Starling debit card to their Apple Wallet and make contactless payments drawing from funds in their Starling account via their Apple devices.

The fintech startup launched a beta for its own app back in March so it’s been pretty quick to add support for Apple’s contactless payment tech — and is lauding itself as the first of the fintech banks to do so. (Although, also today, two European fintech startups are announcing Apple Pay support in some markets.)

Multiple UK banks and building societies already support Apple Pay, including the major high street banks. Although Starling says it will be the first bank in the UK to offer in-app provisioning for Apple Pay users which means that new Starling customers will be able to load their card into their digital wallet virtually, before the physical MasterCard debit card arrives in the post.

Apple pay is accepted as a method of payment by “hundreds of thousands” of retail locations in the UK, according to Apple. Back in May, the company also suggested a majority of UK POS terminals were now able to support higher value contactless payments via the tech (those that don’t support unlimited payments have a cap of £30).

Aside from offering contactless payments with a layer of biometric security, Apple is pushing the privacy angle to drive uptake of its payment tech, noting on its website that “your card details are never shared by Apple when you use Apple Pay, making purchases with your iPhone, Apple Watch, iPad and Mac is the safer, more private way to pay”.

That’s especially interesting when you consider Google’s stated intent, earlier this year, to track credit and debit card spending to further profile web users for ad targeting purposes.

Other ad targeting giants such as Facebook also buy up large amounts of third party data relating to users’ offline lives in a bid to expand its ability to profile people.

Apple Pay shields users’ credit or debit card numbers from this type of tracking because the numbers are not stored on a user’s device nor on Apple’s servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on the device, with each transaction authorized via a one-time unique dynamic security code.