Starling Bank is on a mission to double its customer base to two million in 2020. After focusing on the technology powering its services, it’s now investing heavily into its marketing and adopting a brand-led approach.
But with traditional banks getting more tech-savvy and increased competition from other fintech start-ups encroaching on its user base, it won't be an easy ride for the company as it endeavours to break-even this year.
Something to shout about
Starling Bank - now the third biggest neobank - was established in 2014 by Anne Boden, offering mobile current accounts for business and personal users.
“We’re not a start-up anymore. We’re like a gangly teenager, in that we’re still learning but we have the energy of youth behind us,” said Rachael Pollard, Starling Bank's head of growth.
2019 was a pivotal year for the brand. It appointed its first-ever head of growth, reached one million customers and launched its first-ever UK-wide TV campaign. It was also voted the top bank for the second year running at the British Bank Awards.
“We’ve been very British about the way we position ourselves, and how much we shout out about what we do,” admitted Pollard. “We needed to take a more bombastic approach to let the UK know more about us.”
In an attempt to escape the London bubble and become nationally recognised, its first major investment into marketing resulted in a TV campaign to present Starling as a national bank for affluent, older customers. It worked. A midway campaign dip test reported that prompted brand awareness had jumped up to 38% from 22% across the country.
Hitting the ground running in 2020, Pollard said Starling Bank will continue to plough money into big brand marketing. Throughout January, which Pollard says is a “massive month” for the company, there will be a refreshed version of its October campaign.
Beyond that, it has another major through the line campaign in the works, with a planned release in the first quarter. “It will be different to the current creative, but a continuation of the theme,” she divulged.
This year, Pollard said that “travel will be a much bigger strategic campaign.” ‘Travel with no fees’ was a small campaign the team launched last year that targeted all the main airport terminals and train stations.
Two million milestone
All of this is in aid of a big customer target the banks bosses have set. “We’re really gathering pace,” said Pollard. In 2019, the bank had doubled its 500,000 customer base by November. The key KPI for 2020 is to reach two million customers.
Despite the one million milestone, compared to other fintech players, Starling Bank still has a lot of catching up to do. Though while it trails behind Revolut’s eight million customers, and Monzo’s 3.3 million, Starling Bank feels it has the edge over competitors due to the kind of customers it’s attracting.
“If we were going for pure volume, it would be different. But we want two million higher-value customers, who are harder to reach and harder to acquire,” Pollard said.
While Monzo has positioned itself as the card for the young professional, Starling Bank has set its sights on the 25 to 44, more affluent, bracket. A smart move, given Monzo is now having to expand its client beyond the young millennials who are taking advantage of its £500 overdraft limit.
However, to assuage trepidation among consumers who are nervous about pivoting away from big, traditional banks is not an easy task, though Starling hopes its big brand-awareness campaigns will "convince people to download the app and give us a go."
Starling is also banking on the residual mistrust of banks leftover from the 2007-2008 banking crisis. “The older bracket is still burned by the banking crisis,” Pollard said. “We want to be a genuine alternative bank for those affected by the banking crisis,” Pollard said. Starling claims to be the only fintech that is fully-regulated and signed up to all the other codes of conduct, which she said is “really good for securing people’s money and giving them peace of mind.”
Competition from traditional banking
While fintech companies benefit from being digital-first, it is questionable how much longer their superior tech will set them apart from traditional banking.
With traditional banks ploughing budgets into digital in a bid to catch up with fintech disruption, Starling Bank needs to keep on its toes. NatWest has even launched a banking app called Bó, designed to compete with the start-ups.
“My hope and ambition for Starling is to disrupt an entire industry, for the better,” said Pollard. “In the future, I hope the word ‘fintech’ becomes redundant, and there are only banks.”
Pollard’s hopes for the future lies in the bank abilities to stay ahead in terms of tech capabilities and greater awareness in places outside of London.
She said that, unlike Monzo who had plans to release a metal card that was criticised for being ‘faddish,’ beyond scaling up its user base, through 2020 Starling hopes to run its own race though “new functionalities on the app. We’re constantly testing and trying to make our product better.”