Unlike its competitors, Starling Bank has achieved break-even this October and expects to be monthly profitable from here onwards on an operating profit basis.
Boden has already predicted this during August: “Despite the coronavirus emergency leading to a drop in interchange income for several weeks, card volumes are back to pre-lockdown levels. This, combined with our lending and growth in other parts of the business, has resulted in a significant increase in our annualised revenue run rate, which now stands at £80m. We remain on track to reach break-even by the end of 2020, hitting the target we set a year ago.”
And Starling Bank has apparently delivered. With nearly 1.8 million accounts, £4 billion in deposits and £1.5 billion of lending, Starling generated £9 million of revenue for the month of October 2020, which represents an annualised run rate of £108 million.
Boden comment on why she believes Starling Bank achieved this: “We’ve never ‘bought’ customers with cash incentives, or promotions. We don’t have jazzy metal cards and we don’t offer ‘perks’ such as access to premium airport lounges. Customers join us for the features that help them manage their money and their businesses in a more effective way. They want to be part of the Starling ecosystem with its range of current, joint, euro, dollar and business accounts.”
Starling also continued to launch new products, including chargeable subscription features such as the SME Toolkit and Kite card, an account for children, which bring added value to customers.
“The reason Starling keeps powering on is that we don’t think like a bank. As per my original pitch, we are a technology company. Today, banking is seen as a tech business. Starling has played a huge part in making that happen,” says Anne Boden.
Starling’s CEO also disclosed plans for the near future: “I’m certain that we will become a formidable competitor in the European banking market as we gear up to scale across Europe,” says Boden. “We know that our technology is hugely scalable because our tech team runs a constant simulation at around ten times our current capacity. We’re prepared for a sudden influx of customers and transactions.”