Interesting. Can you explain further?
Yeah very curious why a premium account would be £5 but only 2€ and $1
Yep… I’m curious too, but willing to learn.
Funny though, I’ve never seen Starling as a tiered product…
M’bad - sorry for not being clear.
- Personal account: £0 fee tier - 1 GBP current account 1 EUR current account
- Premium account: £7.99 fee tier - 5 GBP current accounts 2 EUR current accounts 1 USD chequing account
I see. But I’d be interested to see how Starling would describe the rationale for such a framework. Feels a bit like something Revolut might do.
What’s your thinking around the benefits, @cap?
Tiered banking has always been obvious for those watching the banking sector (both legacy and fintech) closely.
There are those that think fintech banking is a political movement (It is not) and therefore think that it is possible to build banking on the back of good will without making profits or revenue.
At the end of the day, banking needs to make money. The hard reality with the Plus situation was that the bar was set too high and the venture-driven KPIs started kicking in.
How does a bank make money?
Packaged Accounts: Bundling a service and getting margin on the services.
Credit: Maturity transformation. Getting deposits and paying some interest on it and originating loans and charging a higher interest rate.
Investment Management: Taking a percentage based fee directly (Account/management fee) or indirectly (Mutual funds).
FX & Insurance: Taking a spread and adding a commission, sometimes both.
Wholesale: Outside of this discussion as there are none (Although I would not be surprised at all if Revolut spins up two more interesting divisions in the future: Revolut Private Bank and Revolut Investment Bank).
I don’t buy some of the nonsense that gets thrown about (Ooo they make money using interchange or Ooo banks love deposits). They need to make money somehow.
Standard transactional banking has always been expensive and whilst the fintechs lower significantly the cost of operating and maintaining each current account, it is still not zero.
Benefits for who?
Shareholders get a return. Customers get a good experience (and if they’re fintech) potentially lower pricing.
Don’t see it happening; accounts themselves have a precedent to be free in the UK
I can see Starling making them free and then using deposits to fund loans in each currency (for example using personal USD deposits to loan to businesses to pay off suppliers)
I also think Starling need to stop making directors liable for company debt if they actually want to make any profit; no one makes a company limited to have unlimited liability
They have similar from the marketplace - they really need to work on the marketplace though tbh; we need more personal ones for them to have an actual revenue stream from them
Retail banks don’t normally manage the investment space - also to mention retail banks are doing a lot better in the UK currently to the point one of Barclays big boy shareholders (owns something like 5+%) is pushing for Barclays to get rid of its investment arm as the retail side of loans is a lot more profitable
Lloyd’s and RBS use the retail method that the guy is pushing for Barclays to adopt
Revolut Private Bank isn’t happening - ever
The relationship of a private banker just isn’t something Revolut is equipped to handle
Private banks that operate globally need to be able to quick literally bend over for a customer if needed
There was a story I read about a person forgetting their wallet, their private banker ran on over to give them cash
There was another story I read about a volcanic eruption happening and them being stranded (plane wise), their private banker got them on a boat out of the country to another airport which hadn’t been grounded to continue their journey
It’s things like these that Revolut couldn’t offer as it is - it doesn’t have the reputation for one, for another it won’t ever offer all the perks or soft perks that someone would want
As for Revolut investment bank - I can see them offering investment through DriveWealth and partners but I don’t see them going further than that since lending is where the money is
Thanks chaps - interesting ideas.
If it was to cost money with no way of waving it, may as well open a Barclays foreign currency account or one with another bank.
I’m really looking forward to cheque imaging as that will negate my need to going to my local Nationwide every month to deposit a cheque (note, they are closed on Thursdays and Saturday afternoons!). Although, the packaged FlexPlus account is still good value for me - and I can’t see anything touching that for the moment.
The question would be what a packaged account would entail. I liked the idea of Monzo’s ‘Pick n Mix’ approach, and could be a way of flexing the idea of the marketplace (or at least rejuvenating) it.
I do think there is more scope for rewards and cashback (I use BA Shopping for example to earn Avios points), which could be leveraged through merchant data.
Credit card - Will be interesting to see what they can innovate on, and how that integrates with the current app.
I’ve got a feeling that cheque imaging is very close.
The last batch of cheques I sent in were processed very quickly.
…coming soon ™
In the Fintech world, don’t hold your breath.
Starling credit card - we’re told it’s coming. It’ll surely have something built-in to make it interesting. I just don’t see a bog-standard credit card somehow…
I would like to see their market place offer credit cards. I highly doubt that starling will offer one that compares with Amex or a lot of the other cash back cards. However if the company did their own credit check and used starling for the KYC. It could mean a much quicker process.
I’d also like to see batter savings integrations. Basically what Monzo tried but without offering less interest than going direct to the provider. I might be thinking about this wrong but surely other banks should be paying starling to access their customer base??
I agree on the credit card in that I have an Amex so don’t need one… unless starling offered one with no fx fees then I’d be interested
I would need some rewards on there to make a Starling card worth it - might be an idea for them to issue for IHG and Virgin maybe?
Or at least marketplace them while simultaneously offering their own credit. Most people either want a credit card or a rewards card - no in between
I’d be interested in a Starling credit card, but it’d have to do something special to be a better deal than my Barclaycard.
Also keen to see how well Starling’s cheque scanning works. After my experience with Barclays this Christmas - paid in after about a dozen attempts, and some truly awful in-app border recognition - it’s got to be worth a try.
Trading is separate from private banking & wealth management.
I doubt they’d literally do that
Did I… say they were the same? I’d be interested to see the quote