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Capability and Innovation Fund: Our progress so far

30th August 2019

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Earlier this year, Banking Competition Remedies (BCR) chose Starling to receive a £100 million grant from the Capability and Innovation Fund (CIF). This grant is accelerating our ability to help radically transform banking for small and medium enterprises (SMEs), the lifeblood of the British economy.

In our pledge to improve SME banking, we outlined how we would develop our existing business accounts and launch further products and services to support small businesses. Today, we’re giving an update on our progress so far, which we report every three months to BCR, the independent body who administer CIF. It’s been a jam-packed few months with many more exciting announcements to come.

Recruitment

Between April and June 2019, we recruited 81 people focused on improving and developing our offerings for business customers. Of these, 23 were engineers. We’ve welcomed new joiners both to Starling HQ in London and to our sparkly new office in Southampton.

As always, we continue our commitment to inclusive and ethical technology, built by a diverse team. In June 2019, 35% of senior positions were held by women and this has since increased to 39%. That means we’re only one percent from our Women in Finance Charter target of 40% for 2021.

Customer growth

What with newspaper headlines, London Underground advertising, teal buses in Edinburgh and Glasgow and ongoing word of mouth recommendations, the number of Starling customers has rocketed.

Our 2019 target for business customers was 51,000. We hit this target in early July 2019, almost six months ahead of schedule. By the end of 2023, we aim to support 450,000 SME customers.

It is important for us that we help businesses all over the UK, not just in London. Our goal is for 60% of our business customers to be based outside London. As of June 2019, we’re above target at 61%.

New features

Back in February, we promised to launch a web portal for business customers by the end of September. We are on track to stick to this commitment - stay tuned for updates.

In our bid, we also outlined 13 features that we would launch this year. Ten are in design or development and we’ve started on a further six due for next year. Over the next four years, we want to build a suite of more than fifty digital banking products for our customers. This includes simplifying complicated processes for SMEs with tools such as instant invoicing and VAT management.

Existing features of Starling’s digital business accounts include real-time notifications for income and outgoings, the ability to separate money from your main balance and integrations with online accounting software providers such as Xero. Customers can also link to Freeagent, a partnership that launched in the quarter ended June 2019.

All of our SME integrations are available through the Starling Marketplace, a space in the app where customers can seamlessly connect to third party financial products and services. There are 14 more integrations in the pipeline and we’re aiming for 48 by the end of 2022.

Business accounts are available to limited companies with one or multiple people of significant control, and sole traders. Our multi-user business accounts launched in July 2019, one of the most requested types of account from customers.

Lending for business customers

One particular area that we’re working hard to improve for SMEs is lending. Too often, small businesses struggle to find funding or have to wade through an excess of paperwork to get there. We want to change that.

Team Starling is working towards a £913m lending target by 2023. We’re developing our own products, partnering with leading SME lenders, and working with selected lending providers through the Starling Marketplace.

Funding

On top of the £100 million we were awarded by BCR, we also pledged to invest £95 million of our own funds. So far, we’ve raised £50 million and invested a further £1.67 million towards this goal. There’s been no slowing down.

We’re confident that we can deliver these ambitious milestones, set out to make banking better for businesses across the UK. To find out more about our business accounts and how they help SMEs manage their money, have a read of our business case studies. You’ll find everything from farming to cheffing, travel blogging to calligraphy.

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