Starling Bank boss Anne Boden said her booming merchant banking business could overtake Barclays Bank in the SME market in the medium term.
Image source: Anne Boden / Starling Bank
When it comes to what customers think of neobanks versus incumbents, the numbers are clear. They love them. But the proportion of the market held by companies like Monzo and Starling is still relatively small after five years of digital disruption compared to major century-old banks like Barclays.
That could be about to change, according to Anne Boden, founder and CEO of Starling Bank.
Boden told the Pennsylvania the news agency yesterday that in five years Starling could overtake Barclays, for example, in the business banking market. In fact, it is a commercial objective.
Five years, she said, was a “very realistic” period in which she could double her share of UK business banking. He currently owns 7 percent. Barclays owns 15 percent.
Starling launched its corporate accounts just three years ago.
“In a market where competition is almost non-existent, entrepreneurs and small business owners have for too long been marginalized and exploited by the big banks,” Boden said at the time.
Since then, Monzo and Revolut as well as specialized digital banks reserved for SMEs like Tide, Coconut and Allica have launched professional accounts and / or obtained banking licenses.
Starling, however, was a smash hit in the category.
On the eve of the pandemic, it had just over 100,000 corporate banking customers after launching its SME lending business on loans of up to £ 250,000.
It went on to become one of the first providers of Bounce Back loans in 2020. In total, it has loaned over £ 1.58 billion to over 53,000 public limited companies and individual traders through the government-backed program in Canada. last count. In total, the bank said in July it had lent £ 2.18 billion to SMEs.
At the end of 2020, it held nearly 3% of the SME banking services market, up more than 100% today. While this growth rate will be difficult to maintain over the long term, the bank has big ambitions.
Starling CFO Declan Ferguson said in July he expected to have … “double-digit market share in the next 18 months.” That means he would get closer to Barclays by the end of 2022.