Challenger bank Starling is offering businesses in various sectors the chance to provide retail banking services through its application programming interfaces (APIs).
The service, which already has its first customer, will enable businesses to offer their customers bank services such as current and savings accounts without having to become a bank themselves.
Starling’s banking-as-a-service can be used in sectors such as retail by companies that want to offer their customers savings and current accounts without the need for heavy technology development because they will use the bank’s APIs.
Regulatory approval will also be unnecessary because the service will be operated using Starling’s banking licence. The APIs can be implemented with a few lines of code and give the bank’s partners access to major payment systems such as Faster Payments, SEPA and Bacs.
Anne Boden, chief executive of Starling Bank, said platform strategies have taken off in many other industries. She cited the rise of Airbnb, Uber and Apple in the markets for accommodation, transport and music and yet those companies own no properties, vehicles or content themselves.
“As a new-generation digital bank, Starling is now bringing the model to UK banking, enabling other businesses to build banking services on top of its own-label banking infrastructure,” she said.
Starling Bank was designed by Boden, a banker with an IT background. It aims to use modern technology to make banking as convenient as possible, while enabling customers to benefit from the data they generate in their everyday lives.
Just over a year after gaining its UK banking licence with restrictions, and soon after the restrictions on its licence were lifted in April 2017, Starling made its services available through its app.
The bank’s service is already being used by savings marketplace Raisin UK to open accounts for its customers.
Kevin Mountford, CEO at Raisin UK, said: “The Raisin UK marketplace has really struck a chord with consumers since launching a few months ago. Partnering with Starling will facilitate our growth, as we expand our partner bank network and offer consumers a broader array of savings products.”
In the past, financial services firms and companies such as retailers have partnered banks to offer financial services whereby they brand the front end but the banking service, which includes the systems and regulatory approval, is provided by a traditional bank.
Starling’s banking-as-a-service will appeal to businesses that want to offer banking services delivered via the latest technology.