The mobile banking stalwart is beginning to add competitor services into its marketplace. What does this mean for its future?
Starling Bank has today announced a partnership with Wealthify, the online investment service backed by Aviva. Users of Starling’s third-party marketplace will now receive access to Wealthify’s low-fee ISA and general investment plans, which contain a range of investments including shares, bonds, property and commodities.
Starling’s in-app marketplace formally launched in Feburary 2018, however the bank has been slowly adding new partners to its rosters for more than a year. Its first partnership was with money transfer service TransferWise, which was announced two days before the bank itself had even launched to the public in March 2017.
So far, the bank has steered clear of making partnerships with direct competitors, instead preferring to ‘cover all bases’ with the range of partners from pension provider PensionBee to digital receipts start-up Flux.
Fellow digital banking giant Monzo had instead opted for the former route, allowing users to compare offerings of the same service (e.g. investments or energy switching services) from multiple providers. However as of last week, Monzo has now reduced its marketplace beta to an alpha-stage programme, removing the options for investments and savings accounts entirely.
“The open architecture marketplace that Starling has created is a vision of the future of banking, and how it should be – seamless access to great products , coupled with a complete view of what you own and what it’s worth,” said Michelle Pearce, chief investment officer at Wealthify. “Their simple and transparent approach is perfectly aligned with our mission to democratise investing, by breaking down the common barriers holding people back, such as lack of confidence, the belief that you need to be an expert to invest, or thinking you need lots of money.”
Wealthify’s minimum investment begins at £1, where its experts then begin to build and manage investment plans for users based on their goals, and preferred balance between risk and return. The platform manages its portfolios in exchange for an annual fee of 0.7 per cent, in addition to average fund charges of 0.18 per cent per year.
Starling Bank’s chief platform officer Megan Caywood added: “At Starling, we're on a mission to deliver our customers the best banking experience in the world. By partnering with innovative and disruptive companies such as Wealthify, we're aiming to bring the best financial services and products directly into our customer’s pockets through our in-app Marketplace. We are excited to welcome Wealthify and look forward to announcing more partnerships soon.”