Is Starling Bank Safe?

Company size:  

Starling Bank was launched back in 2014 by CEO Anne Boden. Having started her career at Lloyds Bank, where she helped architect the CHAPS network in the UK, Anne held a number of senior leadership roles at UBS, RBS and lastly as COO at Allied Irish Bank. Frustrated by the existing banking systems not adapting with new technologies to improve the experience for its customers, Anne decided the only way she would be able to bring these to market would be to launch a new bank from the ground up.

Starling Bank is still privately owned with Anne Boden, employees, ex-employees and an employee benefits trust owning 24% of shares. Other investors include Harry McPike, a global private investor with a focus on technology and financial sector opportunities and Merian Global Investors, a leading public investor in the UK. Harry McPike is represented on the board by two investing directors: Lázaro Campos, a fintech investor, entrepreneur and former CEO of SWIFT, and Marcus Traill, a senior investment management professional.

In February 2020, Starling Bank raised £60 million from its existing investors, Merian Global Investors and JTC. The investment brings the total raised by Starling to £323 million and follows two funding rounds of £105 million in aggregate led by Merian in 2019. The new funding will enable the bank to continue its rapid expansion as it disrupts the banking industry and provides genuine competition to the legacy banks. Starling will also award shares to all 800 employees, allowing everyone in the company to share directly in its success.CEO, Anne Boden had this to say on Starling Bank’s latest investment: “The support of our existing investors represents a huge endorsement of our business strategy, as we continue to ramp up our growth.

We’re constantly innovating and have big ambitions to turn Starling into a world-leading digital bank.” Anne is keeping a focus on a potential stock market float in 2022.

The firm decided on the name Starling Bank to represent the brand values. The starling bird is sociable, adaptable, friendly and supportive – everything the bank is trying to embolden.

By the end of 2019, Starling Bank officially reached its one millionth customer and with over one million app installs on just the Google Play store, we’re sure they’ve eclipsed this mark by quite some way. Despite these impressive figures, Starling Bank’s growth has still been relatively slow when compared to other digital bank challengers such as Monzo and Revolut (who boast five million + customers each) but it means that Starling Bank hasn’t been party to the same growing pains. Whilst Monzo and Revolut have had numerous compliance scandals, Starling has been able to avoid the same fate. With a focus beyond just consumers and small businesses, Starling also offers its software as a service by making its modern banking and payments infrastructure available to third parties, boasting the UK government as one of its clients.

In 2021, the firm has its sights set firmly on European expansion with the first stop Ireland.

Regulated By: 

Starling Bank, including Starling Bank international money transfers, is regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Conclusion: 

Starling may not be growing at the rate of some of its competitors but it has still surpassed an impressive one million customers and is arguably ‘cutting less corners’ in its quest for growth. . The background of the management team is not simply FX traders, but people with a strong pedigree of senior management positions in large banks. With this in mind we think this reflects the focus Starling has on credibility and ensuring it maintains its compliance requirements. The counter to this could be that the senior management team are as rigid as the big banks, but it would appear they’re all spurred on by the motivation to disrupt the banking sector and bring innovative solutions to its clients.

Starling Bank Customer Reviews

Research:

• 17,670 reviews on TrustPilot (4.5/5)
• 1,439 Google reviews (4.1/5)
• 168,719 reviews on App store (4.9/5)
• 42,731 via Google Play (4.8/5)

True as of December, 2020

Conclusion:

Overall, Starling Bank reviews from across the internet are very positive. Across all platforms, the firm has roughly doubled the number of reviews it has received in the space of just one year. If we consider that year was 2020, then it’s pretty impressive given the wider economic and social landscape. It has a significant number of Trustpilot reviews but being an app-based product it has thousands of positive reviews across the app store and google play. 

Like a lot of its digital competitors, users are frustrated when things go wrong and they don’t have anyone they can speak to in order to resolve the issue. The app is brilliant when all is working smoothly but encounter errors and it could be a while until it’s fixed. Despite receiving a 4.5 / 5 TrustScore on TrustPilot, 10% of reviewers have marked the service as either poor or bad – business customers appearing most unhappy.

Starling Bank Exchange Rate & Fees

No Fees for opening an account.

Starling Bank international money transfers are conducted at the interbank rate but include a 0.4% transaction fee. This is much like charging a 0.4% spread and offering an exchange rate which is 0.4% off the interbank rate but keeps the terminology simple for customers. 0.4% is certainly below the industry average, particularly when you consider their payments are only up to £10,000 where spreads are likely to be 1.5%+. Depending on the currency non-urgent delivery can be between 30p-90p whilst SWIFT payments are priced at £5.50. A transfer of £10,000 can therefore cost up to £45.50.Source: https://www.starlingbank.com/send-money-abroad/

We appreciate the transparency of Starling with its easy-to-use online payment fee calculator for Starling Bank money transfers.

Withdrawing money from an ATM in a foreign country is fee-free, which is better than Revolut, who will charge a 2% fee after you’ve withdrawn £200 in any one month. As all payments through the debit card are made through Mastercard the exchange rate used is the ‘Mastercard international currency rate’ which is slightly worse than the interbank rate.

Limits:

The fact there are no ATM charges regardless of the amount you withdraw means Starling Bank has one of the best pricing structures going with regards to international currency cards. Much like major UK banks, Starling has a £300 daily withdrawal limit whether in the UK or abroad.

Whilst the international currency card is one of the best going, Starling bank international payments, which are bank-to-bank, do have a rather limited scope. Starting at £10 and capped at £10,000 it means users looking to send above this amount simply can’t use Starling Bank at this moment in time. A number of other international money transfer companies, such as Currencies Direct, will offer fee-free international money transfers with no payment limits, though depending on the amount you’re sending and the currency corridor involved, you may pay more in FX spreads.

Conclusion:

The exchange rates are some of the best in the business, and perhaps even a shade cheaper than Transferwise (known to be one of the fairest online money transfer companies around) on some currency corridors, particularly if you use the non-urgent delivery method. The flat 0.4% pricing structure works very well for smaller amounts but users sending large sums might well be able to achieve a better rate when negotiating with a dedicated FX provider. And in any case the maximum limit of £10,000 will immediately make Starling Bank international money transfers irrelevant for a number of users.

Starling Bank Global Reach & Service

Research:

• Dedicated Dealer: None
• Offices: London, Southampton, Dublin, Cardiff
• Ways to approach: In App Chat
• Translations: UK only
• Accepts clients: UK 
• Currencies Handled: 20
• Client reviews: 4.5/5 TrustPilot

Conclusion:

Starling Bank is a UK only offering at the moment, but upon its latest funding round has laid out plans to expand into Europe. As it stands though users outside of the UK are unable to register and should look instead at our top rated money transfer providers for firms with global registration capabilities.

Additional Functionalities

No additional features specifically relating to Starling Bank international payments. Users are only able to conduct spot transfers and not Forward Contracts. 

Being a bank Starling offer a variety of other banking solutions, including:

1. Current Account, both personal and joint.
2. Euro Accounts, where your debit card can also deduct funds from
3. International Currency Card
4. Overdrafts
5. Loans

Conclusion:

Starling Bank is a great solution for expats or travelers who are on the move and are looking to either 

withdraw money or make point-of-sale card payments. Their core bank account offering makes opening and running a bank account simpler than ever. However, their biggest limitations relate specifically to international payments. 

There is no ability to book a forward contract, the number of currencies offered is considerably less than some of the other money transfer companies we review here and there is no dedicated support from an FX expert. For customers who make regular international transfers or have any requirement to hedge their international exposure then Starling Bank international money transfers are simply not an option.