Anne Boden at Starling Bank: Disrupting an industry
Creating the world's first truly SaaS banking platform
Early January 2022 and Anne Boden, founder and CEO of Starling Bank, was enjoying a cup of coffee at a coffee shop in Marylebone, London while compiling an email to Starling’s board and investors, outlining plans for the app-only bank she founded seven years earlier. The bank has grown fast after a relatively slow start; it reported a positive operating profit of £0.8m for October 2020 – making it one of the first retail challenger banks in Europe to turn a profit – and posted operating profits four months in a row to January 2021. It had accumulated numerous ‘best banking app’ accolades, while Boden herself joined the Financial Times’ list of the UK’s top 100 entrepreneurs, one of only four women to do so.
Banking-industry veteran Boden founded the company single-handedly, bootstrapping it entirely with her own resources, then tapping into her network for leads and investment before overseeing successive venture-funding rounds. The latest raise, a March 2021 Series D round of £272 million, valued Starling at £1.1 billion pre-money, giving it unicorn status.
Boden founded Starling with a clear vision: an online bank built entirely around the customer’s needs; one in which its product and its built-from-scratch technology were one and the same. Her ambitions were shared by a generation of UK fintech entrepreneurs who founded Revolut, Wise and Monzo. (The latter was founded in 2015 by Boden’s breakaway CTO, Tom Blomfield, who took Starling’s nascent technology team with him.)
Seven years on, Boden observed digital banking at a tipping point: “Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling.”
Her thoughts now turned to the future. The 1,500+ person bank was growing at pace, expanding services into Europe via a subsidiary in Ireland, and acquiring lending capacity. Listing the company through an IPO was closer than ever.
As the coffee shop began to fill up, Boden reread the email summarising plans to create “the world’s first truly SaaS banking platform” and offer banking as a service. The email concluded: “If we get this right then it makes a $10bn business into a $50bn business and I think we have an 80% chance of pulling it off!”
She sent her email then headed out to her first meeting of the day. The truism that much of what makes for success in a startup’s early days comes under pressure as the firm scales was very much on her mind.
Starling Bank
Founded in 2014, Starling Bank was a UK-based digital bank that offers personal and business current accounts and lending products, promising a better customer-service experience, faster approvals and a more digital-friendly approach than traditional banks. Fully-licensed and regulated, Starling also offered B2B banking and payment services based on its proprietary technology platform.
By June 2021, Starling had more than 2.3 million accounts. Its share of the UK small business banking market reached 6.3%, up from 3% a year earlier. Its deposits reached more than £3.9 billion for its SME customers and more than £2.8 billion for retail customers. (See Exhibit 1. About Starling Bank.)
Advice to leaders
“I’m a woman. I’m 5ft tall. I’m Welsh. I’m middle-aged. I’m from a very ordinary background and I’m the sort of person who’ll chat to somebody in the ladies! Fintech start-ups are all young white guys with goatees – usually with rich parents.”
Anne Boden
Boden began her career at Lloyds Banking Group and built on her 30-year-plus experience in mainstream banking with stints at Standard Chartered Bank, UBS and Aon Corporation, where she was Chief Information Officer (CIO). (See Exhibit 2. Anne Boden career history.)
Starling was not her first attempt to reshape banking. She was working as ABN Amro’s Executive Vice President of European Transaction Banking when it was taken over by Royal Bank of Scotland (RBS) in 2007. Two years later, she was promoted to Head of EMEA for Global Transaction Banking. The division boasted operations in 34 countries, but Boden was convinced it could be better run as a separate entity. After leaving RBS in 2011 she raised “hundreds of millions of pounds” in an attempt to purchase the division from the government-owned bank, but RBS was not interested in selling. In July 2012 she joined Allied Irish Banks (AIB) as Chief Operating Officer (COO) to oversee the bank’s restructuring in the wake of the Great Financial Crisis of 2009 and restore growth.
Values
“I left my job as COO at Allied Irish Banks in December 2013 with a burning desire to create the ‘perfect’ bank. During my three-decade career in banking I had notched up a lengthy mental list of all the things wrong in my sector.”
From Bank Possible to Starling Bank
Boden’s experience at AIB sparked a desire to disrupt the industry. She said:
“I left my job as COO at Allied Irish Banks with a burning desire to create the ‘perfect’ bank. During my career, I’d notched up a lengthy mental list of all the things wrong. Part of me was mad keen to do something, anything, to get going.”
Armed with an idea and her savings, she reached out to her network of contacts to share her venture idea, to which she gave the working title ‘Bank Possible’. She recalled:
“Digital banking had already arrived. Indeed, I had been involved with much of its development while at AIB. But what I was talking about now was starting from scratch to provide a digitised service rather than a series of digitised products. I had to consider how to completely unravel the entire concept of banking. Could I use technology to make banking better?”
From the start, Boden was adamant that she would not build a bank that would rely on someone else’s technology platform or licence: “Starling was going to be a full-stack bank, not an app bolted onto some other institution’s banking licence.”
This was easier said than done; approval from the regulators to launch a new bank would require at least £300 million in investment and months of work.
The first task was assembling a team, which included familiar names from her corporate career. Paul Rippon, ex-head of banking operations at AIB, agreed to help on a part-time basis as CRO, as did Gary Dolman (whom Boden knew from her ABN Amro days when he was COO of transaction banking), who took on the role of CFO. Jason Bates, who’d come from companies including Accenture, Google and Facebook, joined as Chief Customer Officer. Fintech entrepreneur Tom Blomfield, who brought experience in venture-funding, joined as Chief Technology Officer.
Having funded the venture entirely herself, Boden sought to raise £50 million. She said, “[Bank Possible] was running on vapours in terms of finances. I couldn’t see anything past Christmas [2014], because by then I would have run out of cash.”
Initially promising, a potential investment from Route 66 Ventures collapsed when the latter baulked at the fact that some of its proposed investment of £3 million was earmarked by Boden for repaying the £1m+ owed to KPMG and PwC.
On the heels of the failed funding, Blomfield, Dolman and Bates left to form Monzo, taking most of the team with them. This, Boden recalled, was Starling’s “near-death” experience: “I had to start all over again… I had no one on the team, zero prospect of investment and the regulatory process had returned to square one.”
An unexpected call from an associate of Bahamas-based Austrian investor Harald McPike proved extremely timely. After intense questioning by McPike, and a very detailed due-diligence process, McPike invested £48 million in exchange for a majority stake in January 2016 – “the biggest-ever seed round in London,” according to Boden.
She set out for a new team: the first to join was Alan Chandler, whom Boden had worked with at ABN Amro and RBS, and who remains at Starling as “minister without portfolio”. Others included Julian Sawyer, who joined in May 2015 as COO; Tony Ellingham (CFO); John Mountain (CIO); Steve Newson (CTO); and a team of software engineers.
(See Exhibit 3. Starling Bank senior management team in 2022.)
With a new team appointed, Boden turned her attention to applying to the authorities for a banking licence. Starling was granted one in July 2016 and unveiled a new brand identity, aiming to go live by the end of 2016.
Driving your ambition
“I had to consider how to completely unravel the entire concept of banking. Could I use technology to make the banking experience much, much better?”
Technology at the core
With a first funding round secured, building Starling’s technology was next. The business and IT would be one and the same. Boden recalled:
“My goal was to set up an IT system markedly superior to those that powered mainstream banks, which had struggled for years with legacy systems…a dysfunctional mishmash of disparate systems with outdated code and imprisoned data streams, often held together by an ageing infrastructure.”
Starling’s core banking platform was a set of 25 stand-alone applications hosted on different clusters in Amazon’s AWS cloud that interacted with each other. It was set up to build resilience into the system. Each application could be updated independently without having an impact on the other 24. Daily software releases meant that incremental improvements could be tested in real-time and fixed with relative ease. As Chief Banking Officer Helen Bierton, who joined in November 2018 from Santander, explained:
“The tech is built in a way that we can constantly release lots of different code. You don’t get that in a big bank, where you tend to get these big six-week windows of change, and there are all sorts of constraints around those releases. Here, the platform is set up in a way that enables us to adapt quite quickly.”
The bespoke technology platform also allowed Starling to realise operating leverage. Deputy CFO and Chief Strategy Officer Declan Ferguson, who joined from PwC in July 2017, said:
“We have a brand-new infrastructure and code that we own, so we’re not paying someone else to license it. The cost is our 140 software engineers that build and maintain that platform. And that, when you compare it to banks of similar balance-sheet size, is a fraction of what others spend. Owning the tech asset also means not having to maintain legacy platforms for different products that don’t speak to each other properly and constantly create outages.”
Business banking and bounce-back lending
Much of 2017 and 2018 was taken up with improving the app, and “looking at the features that delivered ‘market fit’”. Boden also devoted energy to developing a business-account service, something that “was always very much on the radar for Starling”, and in March 2018 Starling opened its first business account for sole traders, less than a year after launching current accounts.
This move led to Starling receiving a £100 million grant from the UK Government’s Capability and Innovation Fund (CIF). Ferguson said:
“We were the first of the neo-banks that pivoted away from just being a consumer or a retail card product to small-business banking. We spent most of 2018 preparing an application to win that money. We were successful, but we took a big gamble in (a) getting into that, and (b) spending time preparing a stand-out submission that won us the money. But having £100 million as a grant, when you’ve only raised about the same from investors, is huge – you’re basically doubling your funding overnight. And you don’t have to give any equity away for it. What we had to commit to was to build out the UK’s best SME bank and to be seen as a competitor to Royal Bank of Scotland and the rest of the big four.”
(See Exhibit 4. Starling Bank venture-funding rounds and Exhibit 5. Starling milestones.)
After the UK went into lockdown in March 2020, the government announced its Bounce Back Loan Scheme (BBLS), which was designed to enable businesses to access finance more quickly during the outbreak. Ferguson said participating in the scheme “took Starling from a place of not having an enormous lending business to having quite a sizable one – and doing that all remotely,” he recalled. Boden added:
“We had about three days in which to join the government-backed scheme and build a lending platform. On the morning of the scheme opening, businesses started applying to us. We all sat there at our computers, monitoring the applications coming in, and approving and declining loans. Any other company would have looked at this and said, ‘You can’t do this – you shouldn’t aim to get it out so quickly.’ But because Starling is the kind of company it is, everybody just thought, ‘We can do this’, and worked around the clock, literally.”
Getting things done at Starling
Top team members had much to say about how things got done at Starling in the early years. Alan Chandler, Starling’s first employee says:
“We’d received a £100 million grant to deliver 52 products or initiatives over the next four years. But, two years in, we decided we wanted to make changes, so we had to submit a revised business case to the fund’s administrators. They came back with questions and a short timeline. We pulled up a Google document with their questions on one side and space for our answers on the other. Everyone’s sitting together piling into this document and writing it as we go, and Anne is there looking at things and checking stuff out and contributing. We don’t have all this going up and down the chain – it’s all happening in real time; there’s this combined effort. And then it’s done.”
Likewise, Bierton explained how decisions were made with expert input from everyone involved:
“In other banks, you might spend two weeks developing presentations and then managing stakeholders. There’s this whole long cycle of work to persuade, change and present. Here, we start with a ‘press release’ and then invite team members to a Google document which spells out what they are trying to achieve. Each person provides his or her input before they all sit down in a room and have a debate about it.”
Alexandra Frean, a veteran Times journalist who joined Starling in April 2018 as Chief Corporate Affairs Officer almost immediately after interviewing Boden for a profile for the paper, added: “We don’t do jargon, we don’t do PowerPoint presentations.”
Because the teams used Slack to communicate, it was easy to see where and how any project went off course and to learn from mistakes. As Boden explained, this ability to trace back was not about assigning responsibility for failures but vital to their capacity to learn:
“A start-up bank is not about people playing ping-pong, it’s not about people being frivolous or slapdash. It’s about being precise. So, if we find that we’ve made a mistake, we’re quite happy to say, ‘Well, we’ve gone in the wrong direction, let’s just backtrack,’ because we know exactly the path we’ve taken. I think to an outsider it could seem imprecise. But that’s because we’re so vocal about things and so self-reflective.”
Frean said:
“There’s not a great blame culture at Starling. We’ve just hired a new PR agency, for example, and we did a campaign that wasn’t as successful as we hoped. When we had the debrief with them, I think they were waiting for me to give them a hard time. I just said: ‘Let’s not do that again, but let’s remember that we’ve learnt something valuable here.’ That very much is the way that we operate; it’s about continual learning and improvement.”
Bierton explained that the technology, Slack in particular, had the advantage of allowing Boden to keep her finger on the pulse: “On Slack, everything’s visible. Boden can see everything that’s going on and she’s got a really good instinct for when she needs to get involved in something.”
“The culture at Starling is that we’re all quite detailed. We’re all quite geeky. But we’re very good at working as a team.”
Articulating the culture
Reluctant to produce “culture decks to spread the word about ‘how we do things around here’,” Boden initially focused on ensuring that everyone understood that the customer experience comes first. In tandem, she stressed the cultural importance of the technology that pervaded the organisation:
“The culture at Starling is that we’re all quite detailed. We’re all quite geeky. But we’re very good at working as a team. We use collaboration tools well. We use Slack. And we quite enjoy being a team. We have a few rules, such as a ban on people doing PowerPoint presentations for each other internally. I think everyone sees it for what it is – symbolic avoidance of doing things that waste time or replace the real work of running the bank for the optimum benefit of our customers.”
Ferguson observed:
“I think we’ve always had a culture of actually producing things, rather than having meetings or having middle management delegating to others what to do. Everyone at Starling does and produces, whether your specialty is finance, you’re a coder or you’re working in compliance. We have lean teams, so we have a high-performance culture and everyone is expected to produce, regardless of their seniority.”
As the organisation grew, Boden and her team agreed the time had come to spell out Starling’s core values. In signature fashion, she began by poring over a pile of business books in an attempt to pick out and amalgamate the best ideas she could find. Discussions with her team and the marketing department, charged with distilling the Starling brand, produced a set of five values: Listen, Own it, Keep it Simple, Do the Right Thing and Aim for Greatness.
Senior team members described which resonated most for them. Chandler noted, “There’s no hierarchy in the five [values] but, for me, ‘Aim for Greatness’ and ‘Do the Right Thing’ are the two guiding stars, because [we were] always trying to punch above our weight and anything proposed would be evaluated on whether it was true to the bank’s brand image.”
For Frean, the value first to mind was ‘Listen’, in the sense that Starling was listening to its customers.
“‘Own it’,” especially when an initiative failed, said Mountain, explaining the difference between executives who succeeded at Starling and those who did not:
“When things go wrong, we put our hands in the air, and say, ‘This has gone wrong and it was me’. And we’ve made these decisions badly and we didn’t look at that. And we get introspective. And we sometimes thrash it out in large meetings. The process of trawling through everything that you did wrong on something is quite unpleasant. But it’s happened to all of us.”
Growing in people
Starling numbered 62 employees in 2016. Headcount grew exponentially; from 279 in 2018 to 736 in 2019 and 1,500+ in 2022. As Mountain observed, the team was not always an easy environment to join in terms of culture and working practices:
“It’s a company where you need to have been here a long time to operate efficiently within it. I think it’s very hard to turn up and understand how it works, how decisions are made, how to do things. Who do you talk to? You can arrive with a job title and a role description but it wouldn’t matter.”
Starling sought out individuals, at all levels, who were willing to work on executional details. Mountain explained:
“When hiring for technical people, I tell most potential hires – even for a very senior role – that we might not even give them their job title on day one. [I tell them that] they should turn up, do something, get their hands dirty and get stuck in. You can’t survive in this organisation if you’re not prepared to do the detail. The acid test for me is, if someone joins software engineering, it doesn’t matter how senior you are, the first thing you do is do some bug fixes and some software releases. I get everybody who joins to do some low-level work in their department for a bit until they’ve earned some respect. Then we say that they’re in charge.”
Susanna Yallop, who joined as Chief People Officer in 2019, said the capacity to work collaboratively was vital:
“The people who work at Starling do have a specialty, but they also need to be humble enough to work collaboratively with the team, who will have an opinion on their specialty and will want to debate and challenge it. The person has to have that humility of behaviour and response to our consultative decision making. There are people who’ve joined the team and have been very effective – and some who have not.”
While in the early days stock options were reserved for the top team, in February 2020 Starling announced that all employees had been allocated an equal conditional share award, regardless of seniority or role, as a long-term incentive over a four-year period.
Processes and procedures remained unstructured as the organisation grew. Frean said:
“We don’t do the old-fashioned, annual, once-a-year farcical things that I had to do in my last job. That was a waste of time. With my team, we’ve got a tool called Small Improvements, which is a piece of software that we use to communicate. I have regular meetings with my team one-on-one and you can track what you’re doing, how people are performing, what we talked about. It’s an ‘always-on’ approach rather than a big annual review.”
Mentors
“I think that my job is really to look beyond the next mountain and see the horizon. It’s to constantly look at the future, thinking about what we’re going to be doing next year and the year after.”
Anne Boden’s leadership style
Boden’s direct reports agreed that their boss “leads with a huge amount of energy, time, hard work and detail.” The following quotes illustrate the senior team’s views of the CEO’s leadership style:
“Anne gets into the innards of everything. She’s got an immensely curious mind and she’s got the knowledge, especially the technology side. If you feel like Anne’s getting in your territory, because she’s getting into the details, then it’s not for you. You won’t last here, because Anne’s not going to change.”
“She says what she thinks, which sometimes is not what you want to hear, but I’d much rather know that than not know, because I always feel that I know where I stand.”
“She’s very hands-on in that she gets everyone together and asks, ‘What do we need to do next? Who needs to do what? How do we divide this up? How do we make sure that everyone’s doing something to get us there as quickly as possible?’”
“She wants to understand the details in everything, and wants to debate the risks. She’s not afraid to question until she finds answers. She’ll just go through all the layers down to the most junior person. It’s an incredibly effective management style. It leads to Anne unearthing all kinds of problems.”
“Almost never in my time at Starling have I said, ‘Anne, I want to talk about something’, and she says. ‘No, we’re not going to talk about it.’ She sometimes says, ‘I’m going to have to call you tonight’, but I’ve never known her not to provide time for others.”
“She’s very approachable. And she’s very funny. I think it’s hugely important to have that human aspect.”
“She’s always looking over the horizon. As soon as we’ve finished something big – for example, when we got that £100 million grant, which was a huge thing – Anne says: ‘Right, what’s next?’ She’s very good at giving a constant sense of forward motion. There is never a quiet period.”
“She inspires me because of what she’s trying to achieve, what she has achieved and the fact that she’s really focused on trying to deliver that outcome. There’s a big goal: we’re going to transform banking.”
“When I met Anne in 2015, web-browser access to systems was more prevalent than app access. But she was like, ‘No, of course we’re not going to build it on a browser first, we’re just going to have an app.’ It’s obvious now, but that seemed like a brave choice to me at the time. We can all read articles about emerging technology, but Anne will work out how it applies to her industry and get ahead of the curve.”
Asked about how she’d been described, Boden said:
“I'm not a person who has regular monthly or weekly meetings with people. That is not how it works around here. I tend to hover quite high, trying to figure out what we should be doing, then deep-diving when I think we have to readjust to the strategy.
“I think that my job is really to look beyond the next mountain and see the horizon. It’s to constantly look at the future, thinking about what we’re going to be doing next year and the year after. I've got a really great executive team that can worry about the urgent things, the things that need to be done today. But my job is to keep setting the horizon to the things that we could do.”
In terms of how she allocates her time, Boden revealed:
“Strategy starts on a Sunday morning. The weekdays are very much all about interacting with people in short periods of time and quite operational. Sundays are when all the thoughts and issues that we’re dealing with get mulled over. I will write down the big, strategic things we need to do. I share them in an email with the board, and then twice a week I get together with the executive team. Each person will say what they’re thinking – I will sometimes test an idea in that group and they’ll say, ‘No, it doesn’t look like that Anne.’ But then I need to be able to come back with, ‘These are the things we’re working on, these are the things that are important, these are the things where we could go.’ I think that’s how we do strategy.”
Growing across business lines and beyond the UK
By mid-2021, with deposits growing by £400 to £500 million a month, Starling was adding to its range of products and services, and decided to accelerate its lending capabilities by buying an established lender. In July 2021 it made its first acquisition, the £50 million purchase of Fleet Mortgages, a 94-person financial services firm. Ferguson said:
“We didn’t start with a lending product. We started by saying, ‘Banks can fundamentally change their cost base by building their technology from scratch.’ And from there we built a current-account product. It’s only now, four to five years into our strategy, that we’re thinking about balance-sheet management, about what asset classes we want to be in, and what our credit-risk appetite is.”
Thoughts now turned to growing Starling’s geographical footprint, aiming to get a banking licence for its Irish subsidiary to launch expansion into Europe and prepare for a possible IPO. Most of the projected growth in employees would be outside of the UK, so Boden naturally wondered how to ensure that Starling’s culture would be consistent from office to office, and was mindful of the likely impact of growth on Starling’s operations:
“One of the things I’m thinking about is that, when we are as big as Barclays, we’ll have as much bureaucracy as Barclays. I think people who say that you can grow and grow and keep things the same are deluding themselves. Once we are as big as Barclays, we’ll be insulated from the outside world in some respects. We are successful at the moment because we’ve had this huge purpose about what we should be doing and why we’re doing it. Everybody’s involved in moving the organisation forward. And we have a style which is easier to do than talk about. As we get bigger and bigger, we hope to federalise it.”
Chandler observed:
“We’ve got Europe to come, but we’ll get there. We’ve done that in the UK. We know how to do that. The IPO is something that’s new territory. There are many experts in the company, but it is new territory as a management team and how we move forward there.”
For her part, Boden is clearly confident that Starling is ready:
“You can innovate fast when there are also mechanisms for fixing fast when things go wrong, but this works best in a culture of high-performing experts who can handle both complexity and ambiguity and love every minute of it!”
Citing author Eric Ries of The Lean Startup, she added: “The only way to win is to learn faster than everyone else.”
The 2021 winter break had allowed Boden to reflect on what Starling had accomplished and look forward to new opportunities and challenges that becoming an international bank and raising additional financing through an IPO, probably in 2023, would present. The sun was shining as she left the coffee shop in Marylebone, looking forward to feedback on her email.
Anne Boden attended London Business School's Corporate Finance executive programme. Explore our current range of executive Leadership and Finance courses.
Luisa Alemany is Associate Professor of Management Practice in Strategy and Entrepreneurship; Academic Director, Institute of Entrepreneurship and Private Capital and Herminia Ibarra is Charles Handy Chair in Organisational Behaviour; Professor of Organisational Behaviour; Chair, Organisational Behaviour.
London Business School faculty create case studies to use as discussion-provoking teaching materials, enabling students to explore solutions to real-world business challenges. Discover more case studies at the LBS Case Collection.
An atypical entrepreneur
