What are the benefits of building a challenger bank from scratch—starting with a blank canvas to create something totally new? As it turns out, you can avoid a lot of the complex bureaucracy and legacy process challenges that large institutions, some of which are hundreds of years old, are dealing with today.
In episode eight of Talking Agility, I was joined by Julian Sawyer, COO of Starling Bank, to talk about the agility and advantages that are inborn in their modern model of mobile banking. Founded in 2014 by CEO Anne Boden, Starling is a digital-only bank created in response to the growing capacity of technology to change how customers interact with their banks.
“I think the first thing to realize,” Julian explained, “is that we are a technology company doing banking.”
We are a technology company doing banking.
– Julian Sawyer, Starling Bank
Right from the beginning of our conversation, I found that to be an interesting view. So often with large institutions it is the other way around: they are banks trying to integrate emerging technologies to become more digital.
With that in mind, I wanted to know more about Starling’s approach to banking, specifically how agility factors into their model and what it means to be a challenger in the industry. Beyond being a technology company doing banking, Julian says they have a very customer-centric philosophy, which is in their DNA.
“Everything we do is about our customers,” he explained. “That is incredibly important, and I think that a lot of traditional banks have probably lost a little bit of that focus.”
The other advantage he points to is that Starling was built within Amazon Web Services, so there is no legacy infrastructure to slow it down when it comes to responding to consumer trends or demands. All 380 Starling Bank employees work in a single office in London, which helps them to quickly iterate and communicate. They don’t have to schedule meetings three weeks out and then wait for approval by a committee. If something needs to be addressed, they do it in a way any other technology company would.
If you look at what it means to be a challenger or disruptive in the market, it is doing things differently and thinking differently.
“Our culture is closer to some of the leading technology companies like Spotify or Netflix than it is to traditional banks,” Julian says. “And that is really, really important. I think if you look at what it means to be a challenger or disruptive in the market, it is doing things differently and thinking differently.”
So much of what Julian talked about echoes research from Accenture’s report, Enterprise Agility in Financial Services: The New Strategic Imperative. In the report, the ability to respond rapidly to disruption is identified as an imperative for financial services organizations. Yet it has proven to be elusive for many traditional banks, largely due to complex legacy and institutional structures.
So, what is it that makes a technology company better able to respond to disruption? Interestingly, Julian referenced a psychological theory for how Starling approaches its work: Maslow’s Hierarchy of Needs.
“Safety and security is the first and primary level,” he explained. “We’ve spent a huge amount of time and money ensuring that our platform mobile app is safe—your money is safe and your data is secure. That is really, really important.”
Once safety and security are established, it allows for more natural agility. The key stress point is removed, allowing software engineers and subject matter experts to respond to the feedback they get from customers without worrying that their work might compromise safety. Everyone feels protected and empowered to do the work they are good at.
It was a truly fascinating conversation with Julian—we touched on Starling’s development of a culture that supports high performance, and also the important connection between having a vision that everyone believes in and achieving results with focus and execution. We also explored in some detail the DNA of Starling Bank and how Julian foresees the future of Starling as it continues to disrupt the traditional banking model.
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