How Starling Bank’s Engine is launching banks world wide

Engine, the technology Starling Bank was built on, has been busy – and quietly – launching banks around the world, from Australia to Romania.

Engine sells its banking technology to start-ups to launch their own digital banks. 

This clever move means it is expanding in a relatively risk-free way by taking a small stake in each market.

The move, alongside a new boss at Starling, could help it grow internationally, an important step to a potential future Initial Public Offering.  

This is Money’s saving and banking reporter Helen Kirrane speaks to Engine’s chief executive Sam Everington about the new banks Engine is launching, how many more could launch and where.

Starling Bank is selling a slice of its success to banks around the world as the next phase of its growth. 

Last month, it launched Salt Bank in Romania. This is the first time a bank has launched using its Engine software outside of the UK. 

The digital challenger, a subsidiary of Banca Transylvania, was built and launched in just under 12 months.

Engine is now half way through the process of launching a second bank, this time in Australia, called AMP. It is expected to launch in 2025.

With two banks under his belt, Everington is confident about Engine launching more.

He tells This is Money: ‘We know it works now. We’ve launched one bank and are half way through launching a second so it’s not just a one off.

‘I know we can repeat it – and actually, it’s a lot easier the second time.’

‘Because you’re taking patterns, practices technology that we’ve proven and even the partners, we’re working with are building experience in the platform. 

‘So the delivery time should come in and the risk just gets lower and lower.’

The new banks have a 12 month delivery window, which is rapid, but the lead time is reduced by the new banks taking Engine’s patterns, practices and technology which have already been established and proven through Starling.

Given this trajectory, Engine could be on track to launch a bank a year.

Everington says: ‘The new banks’ sustainable growth is really important, it’s very easy to get over ambitious with a tech company.

‘If I could have designed the perfect journey, it would have been to have one bank launch, have a kind of six month gap, have another one go live, have another gap and then have another one and we have, by accident, created that.

‘Given the negotiation times on these things, I don’t have control over it. But now we’ve done two, we’ve got a lot more confidence in doing three, four, five, six, seven afterwards.’

Salt has real ambitions to become a big bank in Romania and in the region, Everington tells This is Money. 

It aims to onboard 250,000 customers in one year, a target they have made a dent in having seen 100,000 sign ups in the space of two weeks. It took Starling two months to reach this numer of sign ups.

Salt aims to have 1million customers in three years. 

Visually, the new banks appear similar to Starling, but the new banks have control over how they look like and which of Starling’s features they will have. 

It is about a 75 per cent split between Starling features and 25 per cent new bank features. 

This takes time and risk out of the launch process. 

‘Real interest from all over the world’

Now that Engine has had the lie of the land in Europe and Australia, it is in talks with banks in Europe and has set its sights on Asia Pacific and the Middle East.

In the fast few weeks alone, Engine’s offices have had banks in from six different countries come in to scope out partnerships.

Everington says: ‘There is a real interest from all over the world in Starling as one of the few successful digital banks anywhere that’s really profitable, apart from Nubank in Brazil.

‘So banks from lots of places turn up. They’re fascinated by what Starling has done and they wish it was their product set in their platform.’

But that is very different to the banks being in the right place to actually make this kind of change and investment, Everington adds.

As Engine has the backing of Starling as the profitable organisation, it can afford to be ‘choosy’ with banks it thinks are really going to do something with Engine’s tech, commit to getting it live, see the project through and build a business on top of that, says Everington.

He says: ‘It’s not it’s not a small undertaking forming a bank or launching a new digital bank and you have to really set out what you’re trying to do. What’s the ambition for it? What’s the purpose? You need some kind of growth angle underneath.’

Success for the new banks will ultimately mean reaching profitability.

Engine’s growth will not come at the expense of Starling Bank

Engine is wholly owned and funded by Starling so all the investment money comes from Starling’s Bank board. But the intention is to make Engine independently profitable in its own right.

Engine makes money from it’s commercial model by charging the banks it works with per customer and per product type they have on the platform.

‘As the new banks we launch grow and become more successful, we make more revenue as well.

‘It’s in everyone’s interest that the platform is as good as it can be to attract customers to it. 

‘We are on a journey and it will take some years to get Engine to independent profitability but that’s the aim,’ says Everington. 

Engine’s continued growth will have an hand in propelling Starling to IPO but there is not set timing for that. 

The growth of Engine will not come at the expense of Starling’s retail business Everington says – ‘the two really benefit from each other.’

‘The continued growth of both businesses is our focus and will continue to be,’ Everington says