How to build a successful digital bank

By Team Engine

In 2023, 24% of the UK population has a digital-only bank account – compared to just 9% in 2019. This impressive growth has been led by more digitally-native generations, with the majority of account holders citing convenience as the main reason for making the switch. Clearly, branchless banking is big business.

But despite this, very few digital banks are actually profitable. A recent report found that of the world’s 400 or so neobanks, less than 5% are actually, well… making bank.

Starling is an exception. As a profitable UK neobank, it’s a shining example of how to go about digital banking the right way.

So: what does a successful digital bank actually look like? The team at Engine, the banking technology platform behind Starling, have shared three key principles to keep in mind.

Digital first doesn’t mean humans last

Picture this: you find an error or problem with your bank account at an unsociable hour. You want it sorted quickly. Sadly, your bank’s 9-5 customer support means you’re left without an agent to speak to – or perhaps more frustratingly, you end up grappling with a chatbot.

Starling gives customers the freedom to self-serve digitally, meaning they can solve many common problems (like needing to freeze a card) in just a few taps. But sometimes, you really do just want to speak to a human – so Starling also has real customer service agents available 24/7. And they don’t give overtly scripted, copy and paste responses. Instead, they bring their personality to the table, providing a stronger experience by connecting with the customer and empathising with their concerns.

Customer Service team member Rowan puts it best . ‘If you receive a notification at 10pm that you don’t recognise, you want to talk to someone then and there – it’s your money and it’s a really big deal. That’s why we’re here to chat 24/7, not just 9am-5pm.’

Move fast, build responsively

Some of the facets of good banking are eternal: clear processes, handy features, good customer service. But the world itself is constantly changing, meaning customers need new capabilities from the banks that serve them. For banks to stand out from the crowd, they need to work iteratively and commit to rapid, responsive product delivery.

Take Starling’s ‘Connected Card’ as an example. The Connected Card was created to help self-isolating customers who were unable to leave the house during the pandemic. Customers could link the second debit card to their existing account, allowing friends or helpers to do their weekly shop for them. It was a clear moment of market need – and Starling were able to respond in an impressively short timeframe.

But it’s not all about time-sensitive events. Sometimes, it’s just a case of responding to what your customers are telling you. Starling recently launched ‘Hide references’, a feature that lets customers hide payment references. Designed to help those wishing to mute unwelcome or abusive references that can accompany bank transfers, this service was built in direct response to a conversation with a real-life customer.

Working in this way achieves two key goals. Naturally, responsive products build loyalty, because your customers can see you’re putting their needs front and centre. But it’s also the best way of genuinely improving banking experiences, which is a big driver for most digital banks.

Hire the right people

Behind every successful bank is a team with a very particular set of skills. But, thankfully, the comparison with Liam Neeson stops there. If you want to build a best-in-class digital customer journey, your people need to be genuinely driven by the desire to make banking experiences as delightful as possible.

Although we hail from a diverse array of backgrounds, the Engine team, whether coming directly from Starling or from other backgrounds or sectors,  are united by our curiosity. This translates to always thinking about how things could be improved, and our sincere desire to build better products for everyone from end users to customer service agents.

This is demonstrated through our recruitment approach. When hiring, we look for individuals that can enjoy “working in a fast-paced environment, across multiple teams and projects and want to be part of changing banking for good. Someone curious and ideas driven, with a genuine interest in making customers’ financial lives better.”

And beyond the good intentions…

So there you have it: be human, build responsively, and hire curious folk. Of course, this all means nothing unless your efforts are underpinned by a platform that actually supports your customer service agents, enables fast innovation, and is proven to drive successful end results.

Want to learn more about how the team at Starling did it? Get in touch to learn more about how Engine powers Britain’s first profitable digital bank.