“The days of the branch are numbered”: Starling’s Anne Boden on how coronavirus could change the face of banking

By Aisling Finn on Tuesday 21 April 2020

Digital Banking

The digital bank founder talks the end of the branch, moving towards a cashless society and navigating the current crisis.

“The days of the branch are numbered”: Starling’s Anne Boden on how coronavirus could change the face of banking
Image source: Anne Boden/Starling Bank.

It’s no secret that the world has been turned on its head as the coronavirus pandemic causes chaos across the globe.

Starling’s CEO and founder Anne Boden is a financial veteran, having worked at several of the big banks, including Lloyds, Standard Chartered and RBS to name but a few, before quitting her job back in 2014 for the “impossible” challenge of starting her own bank.

With all this industry experience it’s no shock that Boden’s opinion is highly regarded among the industry so, AltFi caught up with Anne (over the phone) last week to see what she makes of the current crisis.

Cash is a thing of the past

One of the core changes Starling’s CEO believes coronavirus will bring is the accelerated demise of cash—something which clearly brings lots of long-term benefits as well as some challenges.

Boden told AltFi: “I think this current crisis will speed up certain changes in social trends that are happening and before you know it, I think paper money will largely disappear in the next couple of years, as people are not taking that cash out of the ATM.”

“E-commerce and shopping from home will become the thing to do rather than going into a shop and handing your card over. There are certain things that I think will make the need for physical items to disappear and with that the need to have a branch.”

Boden added that she thinks there is no going back now when it comes to digital payments and online shopping, “there are certain trends that make the need for physical items to disappear.”

And physical cash isn’t the only thing that the entrepreneur predicts will disappear post-coronavirus.

“The days of the branch are numbered”

It should come as no surprise that the CEO of an entirely digital bank doesn’t see the need for bank branches anymore.

“I don’t think there’s any going back now to branches. I think that people don’t want that face-to-face contact, people have got used to having contact on a browser on your phone,” Boden told AltFi.

A huge chunk of digital banking’s popularity can be put down to the ease of use—everything can be accessed from an app on a smartphone, with very few digital banks even having a desktop version of their platforms.

Digital banks took the long-winded and clunky nature of traditional banks and streamlined it down into a simple and frictionless system that incumbent banks could only dream of.

And even before the truly digital banks came along there was Metro Bank, the first bank to be issued a banking licence in over 150 years, which challenged traditional banking by making itself more accessible to customers by having longer opening hours and even opening on Sundays.

“I think this is all great news for digital banks, because it's all about digital, and there's no physical component,” like those pesky bank branches we’ve mentioned.

London’s calling

Boden also thinks that coronavirus will help further cement London’s position as a fintech hub.

The UK has one of the more diverse and fiercely competitive fintech markets and after having seen first-hand the fallout from the 2008 financial crisis, Anne Boden thinks that this crisis will only “help London make the most of its lead” as a global fintech hub.

“Things are moving very fast and changes that are already underway will be picked up. The biggest challengers to London are Berlin and Paris but I don’t think they have enough fintech-traction to take the lead away from London at the moment,” she added.

European fintechs have often struggled to find their feet in the UK, but UK fintechs have less of an issue taking on both European and state-side expansion.

Despite all the economic upheaval going on currently, Boden insists she is an “optimistic entrepreneur” and says that she is “excited that a lot of the things that [she] thought was going to happen four or five years ago are now happening.”

So there you have it, Boden predicts coronavirus could see an end to cash and bank branches for good all while further establishing London as a global fintech incubator.

We'll have to wait and see.

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