After looking at Starlings most recent annual report, I think they’ll likely be profitable on a temporary basis, and then drop back into loss making, unless something drastic changes by then.
The loans will only give a guaranteed uplift for the first twelve months, after that it’s anyones guess.
I think they’re anticipating this conundrum too, by implementing new limits and fees. e.g new post office fees.
I bet a credit card and loans for personal accounts is very near.
Their app doesn’t drive much for personal customers, no open banking either to give it some oomf.
I guess if people like basic then 
We called it?
@Peter_G makes an interesting point, however:
It’ll be interesting to see how their covid-19 loans work out for them over the next few months. I’d predict a rough ride.
I see starling as a business bank with some products for personal customers too. I don’t expect them to focus too much on personal accounts if I’m honest
Well, its biggest market is Banking–as–a–Service. The personal and business accounts are really live demonstrations of that provision.
It might hope it is, but the figures don’t point that way at all.
Starlings BaaS has never been particularly fruitful. Their Department for Work and Pensions integration - a major government contract, nets at most £1m/year. Their latest annual report shows that all platform revenue combined was just £3.2m for the year. (source: https://www.starlingbank.com/docs/annual-reports/Starling-Bank-Annual-Report-2019-21.pdf - page 100 “Payment and Platform Services”).
Not that £3.2m isn’t a lot of money. It’s just no where near their biggest market. And likely won’t be for a long time. Banks don’t want to change rails, it’s incredibly expensive and risky. So Starling will likely rely on mostly new financial services. And those don’t tend to drive a lot of revenue for some time.
Business probably drives a lot of revenue but I think personal accounts are still the core.
I think there was some stat somewhere saying the average age of a starling account owner was northwards of 35+, with large disposable incomes. That’s bad news for starling as they probably won’t get much traction on offering BNPL style products, or monthly account fees.
However, the 35+ bracket is pretty much core Credit Card territory esp for people looking at more ‘premium’ credit cards.
I’ve been looking forward to the Starling credit card since 2019, but as neither Starling or Monzo has launched one yet I’m starting think perhaps issuing credit cards isn’t that great of a business? It surely can’t be technical reasons behind it, and both Starling and Monzo offer loans/overdrafts.
The problem is the card needs to be compelling, especially for the wealthier folk described above.
They’re already catered for with AMEX and the various reward schemes they offer (points, airmiles etc) it would be very difficult to compete there I think.
One way would-be to offer generous cashback but that would be loss making. Any benefit scheme would be difficult…
Another way would be to partner up with AMEX to offer like a starling branded card - but again why would people switch?
A fee-free Amex card for spending overseas or something?
Does bill splitting work the same as Monzo if you’re both Starling? Seems to wanna ping a text link, which I guess could open the starling app if you have it?
But a Monzo user would pay via the link?
The payment links will work for anyone. If you have the Starling app it’ll open that, otherwise you pay by debit card.
The only problem is people who only have a Starling business account have no way (as far as I can tell) to get to the option to pay with a debit card. But it’s not particularly bothersome to copy bank account details into a text message.
Wish Starling supported Paym though.
Not many fintech support paym.
I know. It’s poor form really. In the last couple of weeks I’ve had three different people try to send me a payment to my number, knowing I used to use it at my high street account.
It has to be easier to support than even cheque imaging.
Quite possibly comes down to cost, and then the likes of Monzo having peer to peer payments which is probably the best thing I ever used for bill splitting, makes life so much easier.
I’m not sure why you feel Monzo’s proprietary peer–to–peer system, which runs off of your contacts, is any better than Paym’s ‘peer–to–peer’ system, which runs off of your contacts but across every other bank.
This may be putting 2+2 together and getting 18, but I’ve just had a YouGov survey sent through to me about ‘Mobile App Banking’.
What was slightly interesting was that it started by asking which banks I’m with - I said Monzo and Starling, and then it asked which is my main account (Monzo) but then ignore Monzo and only asked follow-up questions about Starling. Things like ‘what’s missing’, ‘what else can they offer’, ‘what do you find useful’, ‘would you find it useful if your banking app offered xxxx’ (xxxx being things like debt consolidation loans and including ads for relevant financial products in the app).
In the ‘what else can they offer’ I mentioned Credit Cards and OpenBanking api.
It could be a survey being done on behalf of Starling (I found it strange it focused on them when I said Monzo was my main account), or it could be a survey from another banking group who see the Starling service as something they’re aiming for but make better (here’s some free advice to them though - ads in the banking app will NOT do that!).
Or it could just be something completely random…
It would be interesting to know what the survey would have done if I hadn’t mentioned Starling at all. Oh, and of all the banking apps it listed (including Curve and Clearscore) there was no sign of Chase yet.
I have found the YouGuv Direct surveys better at reflecting what companies are actually working on. Ive had two in recent times about Virgin Money which are 100% things they are working on.
I think they ask that main bank account question just to find out more information about. Ive had other banking surveys where I said Santander was my main bank but was asked about Nationwide.
What are Virgin working on?