Open Banking refers to a set of rules introduced across the European Union to increase competition and innovation within the financial services industry. One element of Open Banking is the second Payment Services Directive (PSD2), regulation that means financial providers must let customers easily and securely share their own data.
The drive behind Open Banking is to give customers a say over the sharing of their banking data with third parties - it’s their data, after all, and should be used for their own benefit. Digital banks and FinTechs can then develop consumer-facing retail banking services and apps that use this data to help customers manage their money better.
By the time Open Banking was introduced in January 2018, Starling was already ahead of the curve. In September 2017, Starling became the first mobile-only bank with permission to give customers direct access to third-party products from the app. This meant that when the first partner launched, also in September 2017, the signup process was more seamless and secure. By the time the regulation was introduced, Starling had established its Marketplace and lined up scores of integrations with partners.
As of November 2018, the Marketplace has been open not only to Starling personal customers but also to Starling business customers. The 10 personal account partners include online mortgage, pensions and insurance providers, investment advisors and digital loyalty and receipt apps. The business account Marketplace provides access to gig economy insurance and online accounting software and will soon include lending products from peer-to-peer lender Growth Street. There are scores more partners in the pipeline for all Starling customers, enabling the Starling app to become the central hub for a customer’s entire financial life.
For the big banks, Open Banking is often seen as a set of rules they must obey in order to comply with regulation. But for Starling, Open Banking is an opportunity to give total control to customers over how and why they share their data. And give them the choice to share it in a way that benefits them by cutting down form filling and connecting them to innovative products that make managing money easier.
One example of this is Starling’s integration with online accounting software provider Xero. Once a customer gives permission and connects their Starling business account with their Xero account, their transaction feed will be updated in Xero in real time rather than every few hours as is the case for many old banks. Unlike traditional banks who have built technology on top of outdated systems and processes, Starling have built everything from scratch for today’s digital age. We launched in app stores in May 2017 and we’re constantly updating and polishing our technology to provide fast, efficient service to customers.
All of our integrations with Marketplace partners are enabled by open APIs. This is the name for the technology that allows different apps and software to communicate with each other. Open APIs represent a radically different approach to banking - an industry that has traditionally revolved around the upselling of their own products. At Starling, our focus is building a current account that provides customers with the digital tools they need to manage their finances all from their smartphone. The way that we provide other financial products is by connecting customers to a choice of other FinTechs and companies, each of which have their own focus, such as insurance or investments. What we share with all our partners is a customer-centric, technology-led vision that doesn’t cost the earth.
A year ago, the Starling Marketplace held the potential for a customer to set up insurance in minutes, pool their transaction feed into their accounting software or collect receipts in their banking app. Today, this is a reality. To find out more about Starling Bank, visit www.starlingbank.com.