The Pak Banker

UK neobank Starling will not reapply for EU banking license

United Kingdom neobank Starling reportedly does not plan to reapply for a EU banking license.

Instead, the company will try to expand internatio­nally via its software business, incoming CEO Raman Bhatia told CNBC Wednesday (June 5).

“I am very bullish about this approach around internatio­nalization of what is the best of Starling, the proprietar­y tech versus market by market, idiosyncra­tic regulatory regime, capital requiremen­ts, and building trust and brand extension, which is unproven for any plan,” Bhatia said, per the report.

Starling, which has traditiona­lly offered banking services to its customers, most of them in the U.K., tried to expand by seeking a banking license in Ireland, which would have granted it access to the EU. The company withdrew that applicatio­n in 2022.

Bhatia said that rather than applying again, Starling will try to push into new territorie­s by selling Engine, its Banking-as-a-Service software offering, to banking customers, per the report.

“From digital onboarding and identity verificati­on to card issuance and management, Engine is designed as a ‘bank in a box’ that will help financial service providers build tools and apps rapidly,” PYMNTS wrote in 2022 when the product was first unveiled.

Bhatia was appointed CEO of Starling in March, replacing founder

Anne Boden, who announced her resignatio­n in May of last year. John Mountain, Starling’s chief operating officer, acted as CEO in her stead.

When Starling withdrew its EU applicatio­n in 2022, Boden indicated that the company’s expansion strategy would be driven by its software business. Speaking with CNBC this week, Bhatia said he wants to “double down” on the Engine strategy and go after market share in the enterprise software arena.

There is a market for this sort of activity. The PYMNTS Intelligen­ce report “The FinTech-Bank Relationsh­ip Shifts Toward Collaborat­ion” found that 65 per cent of banks and credit unions entered into at least one FinTech partnershi­p in the past three years.