I was lucky enough to attend Starling Bank‘s business account launch party. It was a nice opportunity to walk around the new office development in Finsbury Square, to meet forward thinking business owners and to understand a bit more about Starling’s roadmap.
I am a happy Starling personal customer and, in my view, if you are interested in fintech, Starling is the company to watch. They were the first of the challenger banks to obtain a banking licence and, of the few challenger banks offering current account, they have the best offer on paper. This review is quite critical but that is because I am holding them to a standard that is well above the norm.
- There was heavy criticism from the audience around spend tracking. Spend tracking as it stands at the moment is extremely simplistic – there are a small number of fixed categories and spend is assigned to one of the categories based on the merchant’s MCC. The result is that your spend will be put into one of a few vague buckets such as “travel” or “bills”. For personal customers with relatively simple budgeting needs, this may suffice but for businesses, this feature is completely useless. Starling have heard this feedback but it seems low on their list of priorities.
- I was the only one to raise the lack of web-based banking. On Starling’s forum, the lack of web-based banking attracted similarly passionate critique to the simplicity of spend tracking. The audience, myself excluded, didn’t seem to mind. Starling confirmed that they are still committed to being mobile only but, when they release their Xero and FreeAgent integrations, that will provide a web interface, sort of. They also suggested that their apps will be made usable on tablets “soon”, which will at least make it easier to see what’s happening without frantically scrolling up and down.
- Xero and FreeAgent integration isn’t here yet but it sounded like that is their top priority right now and will be available in a matter of weeks. CSV export is available now. It sounds like integration with other accounting systems, including Sage and Quickbooks, as well as Yodlee, are a very long way off.
- They have initially chosen to target limited companies, with one significant person of control, with a turnover below £1.7m, who don’t need cash or cheque facilities. They will be able to start using it immediately and will pay nothing. Companies with a turnover over £1.7m that meet the other criteria will be able to sign up but will be liable for yet unannounced fees at a yet unannounced point in the future. Seems like quite a narrow market segment to me. Sole traders, LLPs, companies with more than one controlling party etc., are all coming “soon”.
- Pricing was announced, sort of. For limited companies who either have a turnover below £1.7m or who have fewer than 10 employees, there will not be any charges at all. Not even for foreign currency. Businesses larger than that will enjoy free banking until Starling’s business user base grows (how much?!) and will then have to start paying (how much?!)
- Cash deposits are still coming “soon”. Starling talked a lot about costs but, for most SMEs, the key cost of their banking is cash handling, which Starling don’t offer at all. Take that away and you’re saving something like £5-7.50 per month, after a free 12-24 months, for a high street bank’s electronic tariff.
So, overall, the thing that really stood out to me was the extensive use of the word “soon” and no mention of when “soon” means weeks and when it means probably never. The general vibe in the room was that is ok because Starling is moving fairly quickly. In my view, though, Starling ought to take a page out of Monzo’s book on this one and create something like a publicly accessible Trello board to help customers understand what “soon” means.
In summary, Starling do now have a business current account but it’s very MVP. Personally, I will be revisiting this topic when the requirement for businesses to only one significant person of control is dropped.