API-First Banking

Megan Caywood speaking at APIDays London on October 11, 2016
Everyone needs banking, but they don’t necessarily need banks.

Banking is a vital part of everyone’s life- it’s how we get our salary, pay our bills, and pay our friends. Yet, it’s currently really very bad, and that’s what we’re trying to solve at Starling.

At the heart of the problem is a culture among traditional banks of “owning the customer” — they incentivise customers to switch to their bank with loss making introductory offers like cash back on spending, and then feel like they “own the customer” and proceed to sell them higher profit financial products. Yet, the products they offer are rarely the most attractive on the market so customers usually end up paying over the odds. Then, even if the customer wants to use a different financial product and share their banking data with that service, then they are accused of violating the banks terms and conditions, and then if there is fraud on their account then it’s all on them.

So, because of this customer lock-in, traditional banks haven’t been incentivised to improve the price or the product experience of their offerings, so it’s taken new companies like RateSetter and TransferWise to come in and innovate in this space. This is also why the CMA has come out with Open Banking regulation requiring banks to build open APIs to enable customers to securely share their data.

That’s why we are building our Marketplace Platform at Starling. This allows us to focus on building the world’s best current account and doing what we do best, while simultaneously integrating with the best-in-class financial products and services from across the market to allow our customers to easily access those products from within the Starling app.

This past week I spoke at APIDays at Level39 about what we’re doing at Starling and how we’re developing an open API and Marketplace, and it was awesome to see the excitement and thinking around this space. Over the past 5 years, APIs have been fundamentally changing how software is created and brought to market, because developers have realised that much of the functionality they need to build is redundant to what other companies have already been toiling over, so rather than reinvent the wheel, they strategically integrate those products and services into their offering via APIs. This approach isn’t new to tech, but it’s new to banking, and it’s really exciting to be a part of the story of bringing this kind of tech innovation to financial services.

Fortunately, after speaking at APIDays in Level39, I got to walk down the hall to meet up with David Brear and Jason Bates to do a FinTech Insider podcast to discuss APIs with them, as well as with thought leaders Leda Glyptis and Warwick Business School professor Markos Zachariadis. What really stood out to me in our conversation on the podcast was the excitement on what open APIs will enable, and how this turns traditional banking on its head because it shifts the decision making rubric from what’s best for the P&L to what is best for the customer.

Beers and podcasting with David Brear and Jason Bates on FinTech Insider

If you talk to a product person at a big bank, they’ll talk to you about interest rates, but if you talk to a product person at a tech company they’ll talk to you about user journeys and understanding user problems and solving them uniquely well. That’s why I love working at a tech company that is focusing on revolutionising banking. Because the bar for great user experiences isn’t being set by banks — it’s being set by tech companies like Uber, AirBnB and Xero, and even companies like Nest and Tesla. At Starling we’re excited about bringing that kind of thinking and innovation to banking, and it’s exciting to see others sharing in our excitement to introduce this to the market.

You can sign up to be one of the first to access Starling here: bit.ly/joinus-megan