Neobanks in the UK face significant challenges when it comes to generating profitable income. Starling Bank, a British bank located in England, grew to 3.16 million customers and £452.8 million in revenue from 2016 to 2023. Recently, the Financial Conduct Authority (FCA) levied fines £28.96 million on the bank for failings related to its anti-money laundering (AML) program. According to FCA Joint Executive Director of Enforcement, Therese Chambers, “Starling’s financial sanction screening controls were shockingly lax.” In 2021, Starling agreed to a requirement which restricted it from opening new high-risk accounts, but failed to comply and opened over 54,000 accounts for high-risk customers between September 2021 and November 2023. An FCA review revealed that Starling had internal systemic issues, including lack of AML expertise, failure to monitor compliance effectively, and even poorly managed business loans during COVID-19. https://www.ft.com/content/962772d4-e738-4575-af59-f25483ae8581
The Challenges of UK Neobanks
