Starling Bank, a digital-first financial institution without physical branches, stands at the forefront of the UK's challenger banking revolution. Operating exclusively through mobile apps, the bank has experienced substantial growth in its customer base between 2018 and 2024. In March 2024, Starling reached a significant milestone of 4.2 million customers. Extrapolating from its current growth trajectory, the bank is projected to expand its customer base to over 5.2 million by the end of 2025.

Established in June 2014, Starling Bank is a United Kingdom (UK) based retail bank that provides current accounts to individuals, micro-businesses and sole traders. With no physical branches, Starling Bank is one of a growing number of disruptor or challenger banks which run accounts online through mobile apps. Key figures In the year ending March 31, 2024, Starling Bank had a total of 4.2 million customers. Since its founding, the bank allows customers to transfer to 38 countries worldwide. Although Starling Bank has seen a surge in customers since starting operation, it is still far behind other online only banks in Europe. Disruptors Banking and financial services are typically among the first industries to embrace technological advances; starting as far back in time as the appearance of automated teller machines (ATMs) and credit cards. Ever since the first secure Internet systems for financial operations became available on a large scale, accessing one's bank account online to carry out transactions, pay off credit cards, establish credit lines or invest savings became one of the fastest growing areas of Internet activities. The penetration of online banking in Great Britain has been excelled in part thanks to the agility in which challenger banks can adapt and evolve, as well as to their ability to attract large amounts of funding.

Starling Bank, a UK-based digital bank, offers banking services to individuals, micro-businesses, and sole traders. Between 2018 and 2024, Starling Bank experienced a significant growth in its total number of customer accounts. In 2018, the bank reported 356,000 accounts. In 2019, that number had surged to over one million, tripling the customer account base within a single year. In 2021, the total number of accounts surpassed two million, and by 2022, it reached 2.8 million. As of 2024, the total number of accounts stood at 4.2 million.

The UK-based bank with the highest number of customers in 2023 was Santander, with over 164 million customers worldwide. Barclays followed, with a global customer base of 48 million. Despite their high customer numbers, both these banks rank relatively low when it comes to current account holder customer satisfaction. The top three banks in terms of satisfied customers as of August 2023 were the online banks Starling Bank, First Direct, and Monzo Bank. Are customers switching to online banks? Many current account holders in the United Kingdom switch provider each month. In 2020 and 2021, it seemed like the switches came from the larger banks with many customers to the smaller, more newly founded online banks. The two online banks Starling and Monzo generally have high numbers of net gains for customers, but as of the second quarter of 2023, HSBC and NatWest saw the highest net gains. Complaints of UK bank customers Despite its high worldwide customer number, HSBC seems to have a hard time satisfying its domestic customers in the United Kingdom. In the first half of 2023, HSBC had the second-highest number of banking and credit cards services complaints opened among the domestic banks in the UK.

Acquiring and retaining customers is likely the most critical driver for any bank looking to disrupt the market. Between 2018 and 2022, Starling Bank successfully attracted customers away from other UK banks. However, in 2023, Starling Bank saw negative customer growth, with more customers leaving the bank than new ones joining. This trend reversed in the first half of 2024. While customer acquisition remained below the levels seen from 2018 to 2022, Starling Bank began to see positive customer growth again.

As of January 2025, customers of Wise could send money to 73 countries across the world. At the same time, Revolut was available in 39 countries. The Berlin-based N26 operated in 24 countries. Both Wise and Revolut experienced a rapid customer growth in recent years, with Revolut reaching the milestone of 50 million customers in November 2024. Bunq The Amsterdam-based app-only bank, Bunq, announced in 2019 that they were expanding to a further 22 countries across Europe, bringing their total number of operations to 30 countries. Bunq has seen far less funding than some other online-only banks in Europe. European digital banks on the global stage The European digital banking sector is globally robust. Leading European digital banks, such as Revolut, Wise, and Starling Bank, ranked among the most profitable digital banks worldwide in 2023. Notably, Revolut is the largest digital bank in Europe and the sixth largest digital bank globally by customer base.

The global online banking market is experiencing robust growth, driven by increasing smartphone penetration, a preference for digital-first financial services, and the rising adoption of fintech solutions. The market, estimated at $1 trillion in 2025, is projected to exhibit a Compound Annual Growth Rate (CAGR) of 15% from 2025 to 2033, reaching approximately $3.5 trillion by 2033. This expansion is fueled by several key factors including the convenience and accessibility of online banking platforms, the ability to manage finances 24/7, and the competitive pricing offered by many online-only banks. Furthermore, the integration of advanced technologies such as AI and machine learning is enhancing security, personalization, and customer experience, thus attracting a wider user base. The market segmentation reveals strong growth across both individual consumers and enterprise users, with the segment offering services partnered with other banks currently holding a larger market share but the 'With Own Bank Licence' segment exhibiting faster growth due to increased consumer trust and brand loyalty. Geographical analysis indicates that North America and Europe are currently the dominant markets, however, rapid digitalization in Asia Pacific and other emerging economies presents significant untapped potential for future expansion. Despite the positive growth outlook, challenges remain. Stringent regulatory compliance requirements and concerns about data security and privacy pose significant hurdles for online banks. The intense competition among established players and emerging fintech startups, coupled with the need for continuous technological upgrades to maintain a competitive edge, necessitates a proactive and adaptable approach for all stakeholders in this dynamic market. Successful online banks will focus on delivering superior customer experiences, innovative product offerings, and robust security protocols to retain market share and attract new customers. The increasing demand for personalized financial management tools and the integration of open banking APIs are also shaping the future of this sector.

Established in June 2014, Starling Bank is a United Kingdom (UK) based retail bank that provides current accounts to individuals, micro-businesses and sole traders. With no physical branches, Starling Bank is one of a growing number of disruptor or challenger banks which run accounts online through mobile apps. As of January 2024, the UK was by far the biggest market for Starling, with more than 6.9 million downloads.

Banks employ various strategies to attract and retain their customer base, such as cheap overdrafts, in-credit interest and no withdrawal charges. While the number of new and active customers can be easily observed, customer satisfaction is trickier. Knowing how customers feel about the service received can help banks adjust to the dynamics of an increasingly competitive market. Customer satisfaction for leading banks in the UK According to the Which? customer satisfaction survey, as of November 2024, three digital banks, First Direct, Monzo Bank, and Starling Bank had the highest customer satisfaction score. According to the survey, 83 percent of these banks' customers were satisfied with the banks' services and products, and willing to recommend them to their friends. Investment in selected European countries Among the services that aim at making banking more customer-oriented and effortless is the current account switch service (CASS). CASS allows customers to change their bank account hassle-free, redirecting transactions and transferring payment arrangements. As of the second quarter of 2024, nine out of 20 banks observed increased their customer base following the CASS process. The highest gain-to-loss ratios were recorded by Danske Bank and Santander, gaining respectively 5.29 and 3.27 times more new customers than the ones lost to other banks.

Between 2017 and 2024, Starling Bank experienced a substantial increase in the value of loans and advances offered to its customers. In 2018, it stood at 8.7 million British pounds. In 2021, it exceeded two billion British pounds. In addition to the growing value of loans and advances to costumers, Starling Bank also saw an increase in its customer base. As of 2024, the value of loans and advances exceeded 4.5 billion British pounds, with approximately 4.2 million customers.

Starling Bank was founded in 2014 and received its banking license in 2016, after which its asset base started to increase sharply. The bank's assets exceeded 14.7 billion British pounds in 2024, up from 13.7 billion British pounds in 2023. Along with its assets, the bank saw its customer base rise sharply, estimated to reach over five million customers by the end of 2024.

In 2023, Starling bank maintained high monthly app downloads, with a small increase compared to 2022. As of December 2023, roughly 115,000 people downloaded the app.Established in June 2014, Starling Bank is a United Kingdom (UK) based retail bank that provides current accounts to individuals, micro-businesses and sole-traders. With no physical branches, Starling Bank is one of a growing number of disruptor or challenger banks which run accounts online through mobile apps. Between May 2017 and December 2023, Starling bank had approximately seven million downloads of its banking app worldwide, significantly less than the UK-based Revolut.

The United Kingdom banking as a service (BaaS) platform business size is set to reach US$ 1,545.25 million in 2023. Over the projection period, demand for banking as a service platform solutions is predicted to rise with a CAGR of 16.8%, taking the total valuation in the country to US$ 7,292.29 million by 2033.

2018 to 2022 United Kingdom Banking as a Service Platform Demand Outlook Vs. 2023 to 2033 Forecast

Semi Annual Update

Category-wise Insights

Scope of Report

Founded in 2014, Starling Bank has experienced substantial growth in its employee count. In 2016, when the bank received its banking license, a total of only 62 people were employed at the bank. This figure more than doubled in 2017 and increased further in the following years. By 2021, the total number of employees in Starling Group was 1,941. In 2024, the bank's workforce had grown to 3,231.

Established in June 2014 and commencing operation in the banking industry upon obtaining its banking license in 2016, Starling Bank is UK-based digital bank that offers current accounts to individuals, micro-businesses, and sole traders. As Britain's first digital bank with no physical branches, Starling Bank has emerged as one of the pioneering online banks in the UK, with a significant increase in its customer base between 2016 and 2024. Alongside its customer base, the bank saw its value of equity increase steadily during this time period. In 2024, the bank's total equity amounted to nearly 890 million British pounds.

The rise of digital disruptors, challenger banks, and sustainability-focused financial institutions has transformed the banking landscape, attracting billions in investment capital. To effectively compete with established banks, these newcomers face a dual challenge: they must both drive substantial customer acquisition and successfully retain those customers over time. Customer retention rates among UK banks have historically shown significant variation between traditional and digital banks, with some digital banks achieving impressive customer loyalty while others have struggled to maintain their customer base. In the third quarter of 2024, both Starling Bank and Monzo saw a positive retention ratio. Biggest winners In the third quarter of 2024, Nationwide emerged as the leader in customer retention, achieving an impressive ratio of 2.3 new customers for every one lost. TSB also demonstrated strong performance, with 1.81 customers switching to their services for every departing customer. In stark contrast, AIB Group faced significant challenges, with a concerning ratio of 36.1 customers leaving for each new customer acquired. Customer growth of neobanks Digital-only banks have achieved remarkable growth in the European financial sector, with London-based Revolut leading the charge. In November 2024, Revolut reported a significant milestone of over 50 million global customers, building on its strong momentum from 2024 when monthly app downloads surpassed two million.

In the 2024 customer satisfaction rankings for British banks, online banks dominated the top positions. Monzo emerged as the leader, with 80 percent of its customers likely to recommend the bank to friends and family. Starling Bank followed closely behind, achieving a recommendation rate of 79 percent. Chase rounded out the top three, with 78 percent of respondents indicating they would recommend the bank to others.

Established in 2014, Starling Bank is a United Kingdom (UK) based digital bank that provides current accounts to individuals, micro-businesses and sole-traders. Following the launch of its business account in 2018, the value of small and medium-sized enterprises (SME) deposits at Starling Bank grew significantly between 2018 and 2024. In 2018, the value of SME deposits was 64.06 million British pounds, which grew to approximately 5.76 billion British pounds in 2024.

The United Kingdom's banking landscape in 2024 revealed a competitive field dominated by established institutions, with Barclays leading the pack with 48 million customers worldwide. HSBC followed closely with 41 million customers, showcasing the enduring strength of traditional banks despite the rise of digital challengers. Interestingly, customer numbers don't necessarily correlate with satisfaction, as online banks like Starling Bank, First Direct, and Monzo Bank topped the charts for customer contentment. Market dominance and financial performance While Barclays boasts the largest customer base, HSBC maintains its position as the UK's largest bank by market capitalization. As of December 31, 2024, HSBC's market value reached approximately 176.71 billion U.S. dollars, rebounding to pre-pandemic levels and solidifying its status as Europe's largest bank by market value. This financial strength is further reflected in HSBC's annual revenue, which towered at 65.9 billion British pounds in 2024. Digital transformation and customer retention The banking sector's shift towards digital services has led to widespread branch closures among the UK's "big four" banks, with Barclays, Lloyds, and NatWest each shuttering over 1,000 locations between 2017 and 2024. This transition, while improving efficiency, has also resulted in significant job losses. Despite these changes, some traditional banks have managed to maintain strong customer loyalty. Nationwide, for instance, led UK banks in net current account gains in the third quarter of 2024, attracting over 22,000 new customers through the Current Account Switch Service. However, digital challengers like Revolut have made significant inroads, with the London-based neobank reporting over 50 million global customers by November 2024, highlighting the growing appeal of digital-only banking solutions.