Starling takes on the big banks with business lending play

Link: http://www.telegraph.co.uk/business/2017/10/04/starling-takes-big-banks-business-lending-play/

Date: 4th October, 2017

Media: The Telegraph

What happened?

Anne Boden, the chief executive and founder of Starling, has launched a digital challenger bank app. She realized that business lending had been highly concentrated with a few banks for too long, so she saw the opportunity to create a digital bank that would fulfill peoples needs.

For now it's only available for entrepreneurs, sole traders, and small business owners, and it's an app-only current account with thousands of users. It will launch a business banking service at the beginning of next year. With this app, she hopes to be a step closer to "open banking".

Whom and where it affects?

The main people affected by this app are the start ups and the main banks and lenders of Englad. It also affects the costumers, because with this app they would have more advantages, since they could do all the payments and invoices through their phone.

This business, "Starling Bank", has broken the monopolistic market, because now the customers can choose between the Digital Bank and the conventional Banks.

What sort of public or private institutions are involved?

On the one hand, the public institution involved in this new is the RBS (Royal Bank of Scotland). On the other hand, the private institutions involved in it are the Starling Bank, Williams and Glyn, traditional banking, Monzo (directed by Paul Blomfield) and Atom.

Why is it important for Banking and Finance?

It's important for banking and finance because this will mean a revolution in the sector, due to the fact that depositors will be able to create a current account with their trusted bank through the app.

This will allow customers to save time, which is very important to business owners, since they're very busy and want to save as much time as possible.

Also, at the beginning of next year the app will launch a business banking service, which will be a big competition for traditional banking, because if they clients start using it, this could cause a great change in the banking sector since it would become digital.

What do you think will be the consequences in the foreseeable future?

We think that the consequences in the foreseeable future will be that these types of services that Anne offer, will have a great impact in small-medium businesses, because it gives facilities to people who want to start a business, that other banks cannot offer. For example, they offer a 24/7 service and is completely digital.

Key words: Current account, Business lending play, Traders, Market, Start-up, Digital Challenger Bank.