Banking passport into Ireland was acquired by Starling Bank which relies on a mobile phone app instead to cut running costs and appeal to new customers and is a new U.K. challenger bank that doesn’t have branches.
Taking advantage of the EU ‘passporting’ rights that allow companies to set up in other nations more easily further launches into other European Union (EU) markets at a later date is expected to follow the expansion of the bank into the Republic of Ireland.
The financial passport should make applying for similar passports a formality and authorizes Starling to provide its mobile euro-denominated current account in Ireland. The U.K. home market of the bank may also remain part of the affiliated European Economic Area’s (EEA) member states organization, or negotiate a new agreement and the present U.K. Brexit negotiations, as these will not come to fruition until 2019, is not expected to complicate the process.
However, retention of passporting for U.K. financial services is being resisted at present by the EU.
Open banking and data environment has been envisaged by European and U.K. regulators and is expected to come out in the open soon and which Starling, which Yolt and other mobile phoned based players are also targeting, is hoping to take advantage of.
“Being granted our passport into the Republic of Ireland is an exciting next phase in our journey. The aim of Starling was always to ensure that the whole world could benefit from the opportunity of a healthy financial life, said Anne Boden, Starling’s founder and CEO, while speaking in a statement accompanying the expansion announcement.
The Starling app-based mobile phone account was unveiled in March 2017 in the U.K. home market and is available in Google’s Android operating system or Apple’s iOS. Within two minutes of download with a valid photo ID it can be easily set up. It has added functionality such as budgeting or spending insights to track where consumers’ money is going and it acts like a traditional current account, but with no branches.
Specific mobile-controlled in-app card security options using locational data, joint accounts for customers and forthcoming support for the ApplePay and AndroidPay systems was also trumpeted by a product roadmap announced last week.
The bank focuses on apps in an open banking and data environment where open application programming interfaces (APIs) enable third parties to develop financial products, such as mortgages, that can be easily incorporated and accessed in the app and is additionally working towards delivery of what it terms a ‘marketplace’, which is essentially a banking-as-a-service model that mirrors the cloud computing service model for software.
With somewhere between £20-40 million expected in new investment to fund its overseas expansion plans into Europe, another funding round is in the offing for the start-up challenger bank, according to a news report published by TechCrunch.
(Adapted from CNBC)