Starling Bank is now marketing its proprietary banking software to financial institutions in the United States. This initiative seeks to leverage the persistent reliance of many U.S. banks on aging infrastructure, allowing Starling to generate new revenue streams while addressing modernization needs in the US market.
The London-based fintech, established in 2014 by former banking executive Anne Boden, has positioned its Engine software division as the cornerstone of this international push.
Engine, which was carved out as an independent unit in 2022, offers tools that empower banks to develop and deploy digital services efficiently.
To facilitate client acquisition, Starling has enlisted consulting firms Deloitte and PwC to scout potential partners across North America, with a sharp emphasis on the U.S.
Sam Everington, CEO of Engine, highlighted the opportunity arising from the U.S. banking sector’s slower pace of digital evolution.
He explained that American institutions have not experienced the same urgency for system upgrades as their European counterparts, resulting in largely unchanged core technologies.
However, recent trends like mergers among smaller regional banks are creating momentum for change.
“We’re seeing significant consolidation in the lower tier of regional markets, which makes this an ideal moment to introduce our solutions,” Everington remarked.
Starling anticipates securing its first major U.S. client—a bank with assets between $5 billion and $50 billion—by the beginning of next year.
Discussions are already underway with various lenders, though specifics remain undisclosed.
This software-focused approach contrasts with Starling’s earlier challenges in scaling its consumer banking operations abroad.
Despite amassing nearly 5 million customers primarily in the UK and competing with peers like Revolut and Monzo to challenge traditional giants such as HSBC and Barclays, the bank abandoned efforts to obtain a European license in 2022.
Instead, exporting technology offers a lighter, less regulated path to growth. As group CEO Raman Bhatia noted last December, this model is cost-effective and provides stable fee-based income without the burdens of full-scale overseas banking regulation.
Financially, Engine is targeting £100 million in annual recurring revenue, a goal Everington describes as achievable in the near term.
For the fiscal year ending March 2025, the division reported £3.4 million in recurring revenue against a £12.1 million pre-tax loss—modest figures compared to the group’s overall £714 million in revenues.
To bolster its U.S. presence, Starling formed a Delaware-based subsidiary last year and hired Jody Bhagat, a ex-McKinsey partner, to lead operations.
A $50 million investment is fueling the expansion of a New York office, expected to house 20 to 25 employees.
The U.S. landscape presents both promise and hurdles.
Dominated by entrenched vendors like Jack Henry, Fiserv, and Temenos, which control over 90% of the market, the sector has lagged in adopting innovations such as real-time payments, often relying on patchwork solutions.
Starling aims to disrupt this status quo by targeting mid-sized banks and credit unions, potentially multiple clients in the region.
This aligns with a broader trend among British fintechs seeking U.S. opportunities amid domestic saturation.
Previously, Starling‘s finance chief expressed interest in acquiring a U.S. bank to gain a local license and showcase Engine’s capabilities, which could accelerate adoption. For now, the emphasis remains on software licensing to build resilience and diversify income.
