They’ll learn stuff off each other in a contractual agreement and once that is over…
I really doubt there is much to learn though, the problem has never been the technology; any software engineer can build you a Monzo or Starling given enough time.
The main thing to “learn” is that there needs to be a change of mindset if you want to run a successful modern bank, and somehow I doubt RBS is capable of that. Just like in any big legacy company, there are just too many useless monkeys focused more on protecting their pay check & covering their ass than building a great product. Leasing infrastructure from Starling ain’t gonna change any of that. A round of layoffs will, but who would have enough courage to pull the trigger?
100 times this. People who talk about digital as a channel fundamentally misunderstand it - it’s about culture and mindset. You can buy the tech, but if you don’t change the company…
The only way it would work would be to in the spirit of a reverse acquisition. Let the Starling business rapidly scale up, maintaining its tech culture (assuming it has one - it’s not very open, which isn’t a positive sign, but is likely to be miles ahead of RBS) and then persuade customers to move over to the Starling product, away from the RBS legacy. @j06 put it well in the RBS Challenger Bank thread:
Alas these types of acquisition rarely work well. Mostly due to ego and “we know best” attitude.
(I’d also take the opportunity to spin off the branch network and fundamentally rethink the bank. But that’d have the execs choking on their whatever).
As for Starling, we’re assuming they don’t want to be acquired. Maybe they do? Every startup needs an exit…
If they do want to remain independent, the only way I can see for them (if the RBS thing works out) is to refocus and become a banking platform. Cede the customer to Monzo. But focus on digital-age wholesale / commodity services…
I think that’s a touch unfair. Starling is criticised for not being transparent, then when they do publish, they’re criticised… I think it’s great we’re finally seeing some of this info - investors or not.
Here’s what the letter says:
We previously announced our intention to enter the Irish market in 2018. Once the full implications of the UK’s Brexit deal are understood, whatever the outcome, it’s our intention to launch a Starling proposition in key European markets during 2019.
Maybe they’ll still launch euro accounts for UK residents before then?
It looks like they’ve got until the 31st August to file - I’m assuming they’ll do it tomorrow after the Bank Holiday.
Interestingly, the actual accounts (as opposed to the letter) are about the period to end Nov 17 - so actually cover an earlier period than Monzo’s (whose financial year ended in Feb 18). It looks like Starling, for whatever reason, were waiting as long as possible before lodging them.
I don’t have a problem with the transparency of the letter, I totally welcome that. I just mean that it’s a letter to shareholders, and they don’t have any public shareholders, so seemed kinda odd to me.
I would have thought their private shareholders are up to date with this anyway (as they’ll only be a few), important partnerships and KPI’s I imagine they’re updated weekly/monthly on, so the intended audience for this letter was always the public, so why have it as a shareholder update?
It’s not a problem nor a big deal, I just found it kinda odd.
Agreed. The only significant figure is the average deposit amount, I think.
60% of 210,000 is 126,000 accounts that are seeing monthly use. I wonder how this is defined? Opening the app? Making a transaction?
Also, average deposit seems to me to be different to the average account balance (which I what I thought we were discussing yesterday). If this is a mean average of the amount that every customer pays into their account, then you might be looking at half the 126k figure again who’ve gone to Starling as their main bank.
(But then, I might have got this all wrong - in banking land, does average deposit mean a payment into an account or how much an account holds? )
A mixed picture, I think. But hopefully Starling is on the up - but like others have said, some interesting strategic divergences from Monzo beginning to show. (Have thoughts - will write about them some time…)
R-
