Starling Bank Expands its Reach in the US through Engine Software Platform
UK-based Starling Bank is setting its sights on the US banking industry, with plans to offer its Engine software platform to American banks. This move was reported by the Financial Times (FT), citing statements from the CEO of Engine by Starling.
Engine Software Platform
Starling Bank has enlisted the services of advisers from Deloitte and PwC to assist in scouting potential banking clients for Engine. This cloud-based system enables financial institutions to construct their own digital banking services. The UK fintech’s primary target market spans mid-sized banks and credit unions across North America.
In a statement to Retail Banker International, Starling Bank confirmed its intentions: “We have put the infrastructure in place (team and New York office) to sell into the US market. The US market is home to thousands of small and mid-tier banks that are facing technology obsolescence and that would benefit from the customer-focused, cloud-native core banking solutions that Engine offers.”
Engine’s History and Usage
Engine functions as Starling’s Software-as-a-Service division. The bank began licensing this technology externally in 2022. Currently, Engine is in use with clients in Romania and Australia, and a ten-year contract was agreed upon with a Canadian client last year.
Starling Bank’s Potential Entry into the US Market
Alongside its software platform expansion, Starling Bank is considering various options for launching its own banking operations in the US. These options include either an acquisition or applying for a de novo licence. “The opportunity, as we see it, would be to have a live case study for Engine in the US (whether we re-platform an acquired bank or set up our own) and we believe that the small business market in the US is underserved by banks there today,” the bank stated.
In an interview with FT, Engine CEO Sam Everington highlighted the potential of the US market: “The big focus this year is North America, focused on the US. The banks haven’t had the same pressure to transform their systems [which] are very static. But that is changing.”
Future Plans
Everington also revealed that Starling is planning to secure a deal with an American institution within the “$5bn-50bn asset range” by early next year, following discussions with several prospective clients. As part of these plans, Engine set up a Delaware branch last year and appointed Jody Bhagat, formerly at McKinsey, as president of its US operations.
The business plans to expand its New York office with an investment of $50m, aiming to build a team of 20-25 employees at that location.
As Starling Bank and Engine continue to make strides in the US, they remain committed to their mission of revolutionizing banking with innovative and customer-focused solutions. Their expansion speaks volumes about their ambition and potential, as they seek to navigate the dynamic and complex landscape of the US banking industry.
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