Apr 19, 2021

UK Fintech Week: Goldman Sachs invests £50m in Starling Bank

Starling
GoldmanSachs
Fintech
bank
William Girling
2 min
The start of UK Fintech Week (19 April to 23 April) has already seen Goldman Sachs opt to invest £50m in leading challenger bank Starling
The start of UK Fintech Week (19 April to 23 April) has already seen Goldman Sachs opt to invest £50m in leading challenger bank Starling...

These new funds from Goldman Sachs Growth Equity come as an extension to Starling’s previously oversubscribed Series D round, which netted £272m and brought it to unicorn status.

Now with two million accounts and a deposit base of over £6bn, Starling is the UK’s first digital-only bank to reach profitability and is reportedly on-course to achieve a full profit by the end of its next financial year. Its position as one of the nation’s fastest growing and most successful startups has been noted by Goldman Sachs:

“Starling is one of the leading and most innovative digital banks in the UK, with an ambitious technology-first leadership team and addressing a deep market opportunity. We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential,” said James Hayward, MD.

Meanwhile, Anne Boden, Founder and CEO of Starling, believed that securing the global investment bank’s support “demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling. 

“Goldman Sachs will bring valuable insight as we continue with the expansion of lending in the UK, as well as our European expansion and anticipated M&A.”

Did you know? Anne Boden took the #1 spot in our ‘Top 100 Women in Fintech’ list. Read the full story here.

Investing in the West Midlands

On 13 April, Goldman Sachs announced that it will be creating a new office in Birmingham, UK, a move which will create “hundreds of jobs.” 

The West Midlands region of the country is gaining significant traction with major global FSIs, with Deutsche Bank and HSBC also recognising the potential and setting up headquarters there. 

This break from the generally London-centric financial scene is an interesting development, and one apparently seeking to harness the area’s digital engineering skills, academic research capabilities, and well-established financial services sector.

“Goldman Sachs is one of the world’s most prestigious investment banking institutions, renowned for its laser-focus on recruiting the best and brightest talent and the pre-eminence of its data-driven, customer-centric technologies,” commented Neil Rami, CEO of the West Midlands Growth Company, which helped secure the investment.

“We are delighted that Goldman Sachs has chosen Birmingham as the home of its major new presence, where it will harness the region’s entrepreneurial talent to develop its mission-critical digital expertise, creating hundreds of jobs.”

Image source: Starling Bank

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Jun 23, 2021

CMA warns UK and Irish banks over bank transaction histories

Banking
CMA
Monzo
NatWest
2 min
The UK’s Competition and Markets Authority has issued warnings to several high-profile banks in the UK and Ireland over customer transaction histories

Specifically, the CMA named prominent challenger bank Monzo, the Bank of Ireland, NatWest Group, and Virgin Money as not providing customers with records of their bank transactions within the maximum outlined timescale (40 days after closing the account).

Such information is crucial not only for ensuring a smooth transition from one bank to another, but also to provide a foundation for credit applications in the future. 

According to the Retail Banking Market Investigation Order 2017, 95% of bank and building society customers should receive their bank transaction histories in at least 10 days.

Reputation: A bank’s greatest asset?

Of the 150,000 customers affected, Monzo was by far the main contributor - 143,000 (95.3%) - with the other three dividing the remaining 7,000.

The extent to which the magnitude of its mistake is attributable to being a digital-only bank is not clear, although it may give some customers pause for thought. With a superior customer experience being among the bank’s greatest assets, continued reputational damage is something that it cannot afford to sustain.

Although the CMA’s action in this instance has been to issue each bank a warning and order the immediate dispatch of all outstanding information, it has warned that future breaches will carry heavier consequences. Measures could include legally enforceable compliance audits on a yearly basis.

Helping customers get a better deal

Condemning the banks for negligence that could negatively impact customers’ desires to take out loans or mortgages, Adam Land, CMA Senior Director of Remedies Business and Financial Analysis, promised that his organisation would remain vigilant to similar behaviour moving forward.

“Banks must comply with all the rules – that includes providing a full transaction history promptly.

“We will be watching closely to make sure these leading names stick to their word and don’t let their customers down again. The Bank of Ireland, Monzo, Natwest Group, and Virgin Money should be in no doubt that the CMA stands ready to take further action if these failures are repeated.

Image source: gov.uk

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