Anne Boden isn’t the typical fintech entrepreneur. She is an older woman from Wales, often sporting brightly-coloured clothes in a sector filled with men wearing grey hoodies or designer trainers.
Another way is she unique. Starling’s online bank, Starling, has made a profit unlike many of her competitors in this sector, where large losses seem to be a badge of honor.
Boden, who is now 54, proves that a middle-aged female can still succeed in the corporate world despite her ageism and sexualism. She was 54 years old when she founded the first bank in Britain.
Eight years on, Starling has three million customers and has now broken into the black with a profit of just over £32million.
Anne Boden, Proud: Anne Boden believes that banks can still offer current accounts at no cost and remain profitable
Boden states, “This moment is very important for me.” When I was knocking on doors in 2014 to raise funding, I was saying it is possible to build a bank with great service and free current account banking – and be profitable.
You don’t always have to scam customers. It’s possible to be honest. “I am very proud.”
In its latest funding round this spring, it was valued at £2.5billion and is eyeing a stock market float once markets become less jittery.
Skeptics are skeptical because it sounds too good to true. Rivals say that Covid lending and grants have helped to boost the results.
Fintech valuations soared in the pandemic, but have taken a battering of late. Starling’s real test will come in the next few months when the economy is experiencing severe financial difficulties.
It has, however, achieved profitability, which has been impossible for competitors. What is the secret?
Boden says Starling has high capital returns because it is low-cost and customers have ‘quite large balances’.
She adds that building her own platform for tech gave her a’significant strategic advantage’. Traditional banks claiming that they offer in-credit current accounts for free are a loss leader, she says dismissively.
“Donkeys have said for years that they cannot make any money from current accounts. We have a current account that is free, and we make money.
Boden exudes warmth, friendliness and a certain fintech titan look.
She was the only child of a father and mother who were both steelworkers. Her mum worked at a department shop. Granite determination lies beneath her friendly exterior.
She ran up £1million of debt and sold her house while setting up Starling. A coup attempt by Tom Blomfield (a younger co-founder of Monzo), also saved her.
She has continued to work with Starling but he retired from Monzo last summer. She said, “I don’t think about Tom very often these days.”
Others have occurred. Another confrontation occurred when Lord Agnew (the Government’s ex-anti-fraud Minister) claimed that Starling had been ‘one the worst’ at performing proper checks of firms borrowing under Covid’s bounce back program.
Government estimates suggest taxpayers could face a black hole of £17billion from fraud and company collapses linked to the loans.
Reports suggested she was planning legal action. She says, “We’re not going to sue Lord Agnew.” “But, we were extremely surprised at what he stated. He’s wrong. We will do everything we can to recover the money that has been loaned to those who have defrauded taxpayers and us.
She is also concerned that customers may be victims to fraudsters.
The December 2012 ban on Instagram and Facebook advertising was called by her, provided that the ads targeted victims. “Why should social media platforms make money from fraudulent advertising?” She questions.
Is she aware of any support that was offered by other banks refusing to place ads on Facebook parent Meta’s behalf? She says, “We made a unilateral decision because we believed it was right.” “We will not be able to solve this problem if social media, telecoms companies, banks and law enforcement don’t come together.”
Starling, which had been applying for an Irish bank licence to expand into Europe for four years, raised eyebrows.
According to her, it wasn’t a top priority. ‘We were invited to have the licence but we came to the conclusion it was probably the wrong approach.’ Her primary goal is to focus on Engine, her bank software platform.
“Everyone now wants our technology. Engine will make it available to banks all over the globe. Is she a part of any deals? “We had lots of talks in America and I will be going to Australia in September.”
She said that she doesn’t think there is much stress in the UK’s current cost-of-living crisis.
But account holders spend around 10 percent more energy bills. They also cut down on subscriptions. She says that account holders are now spending 15% less entertainment than in February.
There has not been a reduction in the savings that have been locked up. In fact, savings pots are getting bigger – by £600million at Starling, she says. “The most vulnerable people who never saved will be hit by the crisis,” she said.
The digital bank is not immune from the fallout hitting the tech sector, devastating valuations of businesses such as buy-now, pay later empire Klarna.
Asset manager Jupiter recently cut the value put on its holding of Starling. Boden says her bank is well-positioned as it is financially sound and doesn’t require large funds to grow.
Some of the £130.5million raised in Spring has been earmarked for more acquisitions after its first purchase last year, a £50million deal to buy Fleet Mortgages.
She said, “We are in an excellent position. We don’t have to raise any money again except we choose to.”
Austrian investor Harald McPike and Goldman Sachs are among the backers. Boden has 6 percent of the stake so she is protected in case things don’t go according to plan. Boden could be able to make a huge payday if the stock market crashes. She says, “It could be at the end of next year that the markets heat up again.”
A taskforce is also headed by her to promote more female-led technology firms. “Did know that female-led tech firms are more likely to be funded in the future if they have female backers?” Women backing women are not considered real funding by investors. She squints.
Is tech or banking the more sexist of these two industries? After a moment, she says: “Tech.”
She states that it is great for women to be in leadership roles for women clients and women bank employees. It’s changed but it hasn’t been enough. The men still dominate it.