- Starling will expand its banking as a service (BaaS) business to continental Europe.
- Starling’s expansion is the latest case of a financial services firm moving into the BaaS market.
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Starling will expand its banking as a service (BaaS) business to continental Europe, per AltFi. The UK neobank’s initial markets will include France, Germany, Spain, and the Netherlands.
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Its French expansion, first reported by Les Echos, is slated for 2022 and already includes a hiring push. The neobank made its initial BaaS entry in 2018 in its home market-and clients now include financial services companies like Raisin, MoneyBox, and CurrencyCloud.
Starling CEO Anne Boden outlined her vision for her company’s BaaS offering-she calls it Starling as a Service-in a “letter to herself” within a LinkedIn post. Boden views the BaaS market opportunity as vast, citing the retail, healthcare, utilities, and manufacturing industries as sectors that could benefit from Starling’s product.
She stressed how the neobank can benefit businesses that embrace its BaaS product, pointing to advantages in convenience, cost, and complexity. Boden also noted that Starling can take on the cumbersome tasks of adding financial services-like anti-money laundering and know your customer regulations-while clients only need to roll out the features.
Starling’s expansion is the latest case of a financial services firm moving into-or branching out within-the BaaS market:
- Fellow UK neobank Monese announced earlier this month that it’s jumping into BaaS, with customization choices for clients in various countries.
- French standalone BaaS provider Swan revealed thart it raised Series A funding to power pushes into multiple European markets.
- Australian neobank Volt has shifted focus to BaaS amid upheaval in the country’s consumer neobanking market.
Neobanks like Starling can deploy BaaS for areas in which they have experience-like core banking technology and regulatory maneuvering-without having to establish a front-end user experience.
This could also result in their creating a promising line of business with established non-financial companies. For example, a 2020 survey from Capgemini and Efma shows that banking customers are interested in having access to banking products from healthcare providers, big tech companies, and retailers.
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