Proud: Anne Boden says she has demonstrated that banks can offer free current accounts while being profitable

Starling Founder Anne Boden: Banks DO NOT HAVE to Scam Customers

Anne Boden is not your typical fintech entrepreneur. In an area teeming with young men in gray hoodies and designer sneakers, it’s a Welsh woman in her sixties, invariably sporting brightly colored clothes.

She is unusual in another way. Starling, the online bank she founded, is making a profit unlike most of its rivals in an industry where huge losses are seemingly presented as a macho badge of honor.

Boden is living proof that despite ageism and sexism, a middle-aged woman can succeed in the deadly world of business. In 2014, then aged 54, she became the first British female entrepreneur to set up a new bank.

Eight years later, Starling has three million customers and has now gone into the black with a profit of just over £32million.

Proud: Anne Boden says she has demonstrated that banks can offer free current accounts while being profitable

“It’s a big moment for me,” says Boden, “I’m proving a point. When I was going door to door in 2014 to raise funds, I was saying it’s possible to build a bank with great service and free current accounts – and to be profitable.

“You don’t have to rip off customers, you can be fair. I’m really proud.

In its last funding round this spring, it was valued at £2.5bn and is eyeing a stock market float once markets become less jittery.

Skeptics fear it’s too good to be true. Rivals whisper results were boosted by Covid grants and loans.

Fintech valuations have soared during the pandemic, but have taken a beating lately. The real test of Starling’s mettle will come when the economy hits tough times in the months ahead.

For now, however, it has achieved profitability that competitors have eluded. How come?

Starling makes high returns on capital, Boden says, because of its low costs and the fact that customers keep “pretty high balances” in their accounts.

Building its own technology platform “gave us a huge strategic advantage,” she adds. And she rejects claims by traditional banks that free credit checking accounts are loss leaders.

“For donkey years they said they can’t make money on checking accounts. But we have a free checking account, we’re making money and doing great service because we’re efficient .

It’s hard to imagine anyone looking or less like a female fintech titan than Boden, who exudes warmth and friendliness.

An only child raised in Swansea, his father was a metalworker and his mother worked in a department store. But beneath the benevolent exterior lies a gritty determination.

She racked up £1million in debt and sold her house when Starling was set up. She also survived a coup attempt by a much younger male colleague, Tom Blomfield, co-founder of rival Monzo.

While she moved on with Starling, he quit Monzo last year. “I don’t think of Tom often these days,” she says.

There were other clashes. Former Government anti-fraud minister Lord Agnew claimed Starling was “one of the worst” for carrying out proper checks on companies borrowing under the Covid rebound scheme.

Government estimates suggest taxpayers could face a £17billion black hole from fraud and the collapse of businesses linked to the loans.

There were reports that she was planning legal action. “We are not prosecuting Lord Agnew,” she said. “But we were very surprised by what he said. He is wrong. If loans have been made to people who defrauded us and the taxpayer, we will do our best to recover this money.

Separately, along with the other banks, she worries about customers falling victim to fraudsters.

It halted advertising on Facebook and Instagram in December last year as long as the platforms host ads targeting victims. “Why should a social media platform take advertising money from scammers?” she asks.

Did it have the support of other banks also refusing to place ads with Meta, the parent of Facebook? “We took a one-sided stance because we think it’s right,” she says. “Unless social media and telecom companies, banks and law enforcement come together, we won’t solve the problem.”

Eyebrows were raised after Starling withdrew its application for an Irish banking license as a base for expansion into Europe, after a four-year application process.

It was “no longer the top priority,” she says. “We were asked to get the license but came to the conclusion that was probably the wrong approach.” She says her main goal is to focus on Engine, her banking software platform.

“Everyone wants our technology now. Engine is making it available to other banks around the world. Has it done business yet? september.”

As for the cost of living crisis gripping the UK, she says: “We don’t see a lot of stress from our customers at the moment.”

However, account holders are spending about 10% more on energy bills and reducing their subscriptions. “They’re spending 15% less on entertainment than in February,” she says.

But there has been no depletion of savings balances accumulated during the lockdown. In fact, the savings pots are getting bigger – by £600million at Starling, she says. “The crisis will hit the most vulnerable who have never had savings.”

Digital banking is not immune to the tech sector fallout from devastating valuations of companies such as buy-now, pay later empire Klarna.

Asset manager Jupiter recently reduced the value put on its stake in Starling. But Boden maintains that his bank is well positioned because it is profitable and does not need to raise large funds.

Part of the £130.5m raised in the spring was earmarked for other acquisitions after its first purchase last year, a £50m deal to buy Fleet Mortgages.

“We’re in a great position, we’ll never need to fundraise again unless we want to,” she says.

Backers include Austrian-born investor Harald McPike, Goldman Sachs and Merian Global Investors. Boden herself has a large 6% stake, so her wealth is on the line if things go wrong. A float in the stock market could mean a very big payday for Boden. “It may be the very end of next year when the markets warm up again,” she says.

She also leads a task force to encourage more women-led tech companies. “Did you know that if a women’s business gets the backing of a woman, it’s less likely to get the next round of funding?” Investors think it’s not real funding when women support women. She rolls her eyes.

Which industry is more sexist, banking or technology? She pauses for a moment before saying, “Tech.

“It’s really great to have female leadership, for all the customers and for all the women who work in the banks,” she says. “It has changed, but not enough. It is still very male dominated.

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