Starling Bank by Cheung, Cheuk (2018)

Starling Bank by Cheung, Cheuk (2018) https://padlet.com/cheuk_cheung_2018/q92puby4yg5m This shows an analysis of the market where Starling Bank operates. en-us 2019-10-22 20:27:44 UTC 2025-05-03 01:13:53 UTC hello@padlet.com https://padlet-uploads.storage.googleapis.com/417819179/c0d02595a19b3205bd3fa38bf5231382/download__1_.png Weakness cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401143050
1. Limited services and no physical presence

2.Advocating profligacy

]]> 2019-10-22 20:46:50 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401143050 Threat cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401145428
1. Increasing competition from Big 5 Banks

2.Customer inertia

]]> 2019-10-22 20:53:05 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401145428 Strength cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401145958

1. Innovative banking with first-mover advantage

2. Clinched several awards and accolades

3. Accelerated growth momentum

4. Backed by plump investor funding

5. Outstanding features and offerings

6.Offers the largest marketplace by a financial institution in entire Europe

]]> 2019-10-22 20:54:21 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401145958 Opportunities cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401147737
1. Expanding business banking division

2. Growing customer base of SME businesses and individual current account

3. Huge opportunity in the mobile banking sphere

Offering Banking-as-a-Service

]]> 2019-10-22 20:59:14 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401147737 Starling Bank, now with 460K consumer accounts, raises £75M more for European expansion cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401366346 2019-10-23 11:22:16 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/401366346 cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/404403933 2019-10-30 13:00:43 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/404403933 Company Overview cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410244672 Starling Bank is an innovative take on old school banking, providing banking and financial services to customers without the hassle of branches and tellers. The company is a digital, mobile-only challenger bank operating from the United Kingdom. Its headquarters are situated in London. The bank operates through apps available both on the android as well as IOS platforms.

The bank has been registered under the Prudential Regulation Authority and the Financial Conduct Authority and received approval in 2016. Apart from services like current accounts and business banking, the company offers all the amenities of a regular bank like a MasterCard contactless debit card, money management tools, and 24/7 support. It also provides connections to various digital wallets like Apple Pay, Google Pay, Samsung Pay and Fitbit Pay.

Starling Bank’s Vision is “building the best possible customer experience.” Its mission is to revolutionise banking and “to build a bank that would help you manage your money, all from one app.” Starling Bank’s USP or unique selling point lies in being the challenger bank which is 100% mobile offering innovative digital banking and financial services.]]> 2019-11-12 20:37:07 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410244672 Strength (Detailed analysis) cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410249802 _{Innovative banking with a first-mover advantage}_{: Starling - the best British Bank 2019 is 100% mobile with no branches, no fees and most importantly no paperwork, the account is up and running within 20 minutes. This digital, mobile-only challenger bank based in the UK, employs modernised technology and advanced processing to bring banking into the present to complement today’s fast-paced lifestyle and respect customer’s changing needs. Starling’s goal is to help customer’s make the right decisions for both their current expenditure and future saving. Besides the account holders are provided with a contactless bank card delivered within a week. Also, with the Starling banking app customers get instant notifications when they send or receive payments as part of real-time banking alongside insights that illuminate spending patterns, no fees overseas, 24x7 customer support and an application that only takes minutes. Starling offers everything under one roof – customers can connect to smart financial products and design their own in-app money hub with Starling’s ever-growing financial Marketplace.}_{Clinched several awards and accolades:}_{Starling boasts off many feathers in its hat winning several awards in the past 2 years. It won “Best British Bank” and Best Current Account 2019 at Smart Money People’s 2018 British Bank Awards and was voted as the “Best Business Banking Provider 2019”. Starling also clinched the Best Use of Mobile at the FSTech Awards and adorned the Hottest Fintech startup jewel at The Europas awards. In 2018, Starling also bagged the award for B2B Payments Innovation of the Year at the Payment Awards.}_{Accelerated growth momentum:}_{Starling’s growth pace has been phenomenal: Starling has gained more than 30,000 SME business-account sign-ups, adding to around 500,000 consumer current accounts in a little less than a year’s timeframe which is quite commendable. In November 2017at the heels of the financial year, Starling housed 43,000 personal current accounts. Nine months later, they have opened over 210,000 current accounts – hiking the market capture by almost five times. This momentous growth is marked by the high engagement of their customers, with 60% of them using their account every month. With an average amount of around £900 in each of these accounts, Starling is ahead of its peers. The slice of these customers cutting monthly direct debits has more than doubled year-on-year. Similarly, the proportion of Faster Payments made by these customers has almost tripled over the same time window. Since November, Starling processed over £1 billion customer transactions and monthly transaction volumes cross the £200 million a month mark. Deposits have increased exponentially and currently stand at more than £100 million.}_{Backed by plump investor funding}_{: In Feb 2019, the challenger bank reported it had raised £75 million in further funding. The new capital consisted of a £60 million Series C round led by Merian Global Investors, including Merian Chrysalis, with £15 million in sequence funding from Starling’s current investor and major shareholder Harald McPike. This totalled the funding for UK’s newbie digital bank player to £133 million, not including the more recent £100 million CIF grant. Starling is also well positioned to solicit a grant from the RBS Remedies fund. As one of the very few and select banks qualifying the entry criteria and nursing the dream to create a next-generation SME bank for the UK, Starling is aiming for the skies – it has its eyes on the biggest grant available of £120m. With funding of this scale, is gearing up to deliver a ground-breaking, technology-driven financial proposition to the small and medium-sized enterprises that make up the backbone of the UK economy.}_{Outstanding features and offerings:}_{UK’s Challenger bank offers its customers a suite of unparalleled coveted features which gives it a great competitive advantage over its peers. One of its noted features is “Card lock “ which allows one to lock your card in-app with a single tap if they think they have lost it, unlock it if you find it again, or cancel it with a tap if it’s gone for good. User can also control the power of the card - a simple toggle manages whether the card can make, say, ATM payments, or pay for gambling transactions. The digital mobile bank also offers features like “Next-generation payments” - Split the bill- Get paid back easily or split the bill with Settle Up and “Send money abroad” which allows sending fast and transparently priced money transfers to over 39 countries worldwide in 21 currencies as of 2019, at industry-leading foreign exchange rates. Moreover, it’s more economical than most high-street banks. Starling also offers “Card-free spending” wherein customers can connect their account to the digital wallet of choice, ranging from Apple Pay and Google Pay to Samsung Pay, Fitbit Pay or Garmin Pay. Great travel convenience is another added advantage where the bank account card can be used wherever they accept Mastercard worldwide, with zero fees for ATM withdrawals or transactions overseas, great Mastercard exchange rates and 24/7 customer support. Starling boasts of an all-star, all-human customer support team through the app, email and phone whenever help is needed. Besides, an account holders money is covered up to £85,000 by the Financial Services Compensation Scheme.}_{Offers the largest Marketplace by a financial institution in entire Europe}_{: Starling’s revolutionary and evolving consumer offering is supported by a dedicated Marketplace of supplementary financial products that grant consumers access to view and engage with 8 best-in-class, complementary offerings from insurance and mortgages to pensions and investment services. They have a pipeline of another 80 partners that are slated to join their ecosystem in the near future. The tidy flux of Marketplace partners includes the launch of accounting software platform Xero. The latter will enable Starling’s 20,000 business banking customers to automatically integrate their banking transactions into the UK’s leading cloud accounting platform. With further partnerships on the anvil, Starling business customers will also soon be able to benefit from partnerships with insurance providers Zego and Nimbla, which will provide businesses with the flexible security they need. Besides, a partnership with Growth Street is also in the offing which will help small businesses access funding with just a few taps on their smartphone.}

]]> 2019-11-12 20:47:04 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410249802 Weakness (Detailed analysis) cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410255768 Limited services and no physical presence: Starling’s offerings include current accounts and loans but in case a customer is looking for a wider suite of services, a traditional bank is a better choice. Starling does not have any bank branches, but customers can use the Post Office to deposit and withdraw cash. Also, there is no scope for face-to-face communication with Starling Bank staff personnel.

Advocating profligacy: Starling offers a non-negotiable overdraft option. Once an overdraft is offered, customers can choose to accept it and adjust the amount of overdraft within a ceiling limit. Interest is calculated daily and charged at 15% AER (annual equivalent rate). Starling’s customers having control over the size of their overdraft and no options to remove contactless from their card can leave them vulnerable to overspending. In case customers looking for a decent return on the credit balance in your current account, you’re likely to be better off with a traditional bank.]]> 2019-11-12 20:59:25 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410255768 Opportunities (Detailed analysis) cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410258260 Expanding business banking division: The challenger bank plans to invest heavily in its business-banking division over the next few years, partially piggy-banking on being awarded a £100 million grant from the Capability and Innovation Fund (CIF), which was set up by the Royal Bank of Scotland to fulfill European state aid conditions arising from the bank’s £45 billion U.K. government bailout during the financial crisis.
The growing customer base of SME businesses and individual current account holders: Starling is already supporting several fintech companies and reported collaboration with a dozen others like Instarem, Vitesse, Incuto and AccessPay and has a number of strategic partnerships with companies such as Vocalink, Currencycloud, Form3, Railsback and Bankable. It is also working with FIS Global, the international provider of financial services technology and outsourcing services, which is all set to unveil its offerings using Starling’s services.

Huge opportunity in the mobile banking sphere: Starling Bank has created and rolled out mobile apps for both iOS and Android phones. Starling was also the first UK bank to have a flagship in-app provisioning for Apple Pay. The features of Starling's mobile apps include instant notifications of transactions, locking and unlocking customer's cards to safeguard against unauthorized transactions, classifying transactions for later analysis, creating separate "Goals" where money can be stored separately to customer's main balance and in-app chat with customer service representatives, among others. Starling presently offers market-leading integration Open Banking and open APIs into their "marketplace" to permit customers to use their data with other financial products. They also have a partnership with the Post Office in order to allow cash to be deposited.

Offering Banking-as-a-Service: Having built best-in-class infrastructure to support their own banking needs, UK’s challenger bank is imbibing advanced technology to offer distinct Banking-as-a-Service propositions to financial service companies, corporates and governments in the UK and across Europe. In fiscal 2018, they successfully renewed the contract with the Department for Work and Pensions (DWP) for the support of the Universal Credit. They also entered into an agreement to provide payment services to support new initiatives at RBS/NatWest. Additionally, they are the sole provider of access to UK payments schemes for Mastercard Send, which powers payments capabilities for some of the largest technology companies in the US. Analysts believe that the banking industry as a whole is facing a watershed moment. The API economy, new payments legislation such as PSD2 and Open Banking, together with scalable Banking-as-a-Service propositions that Starlings offer, are revolutionising the banking industry. In this regards, Starling reported that they had accomplished a seminal contract with Raisin UK, the online savings marketplace that enables their customers to offer savings products via the challenger bank’s infrastructure. Starling’s Payment Services and Banking-as-a-Service clients include the prestigious French challenger bank Ditto, government departments such as the Department for Work and Pensions and savings and investment marketplace Raisin UK.]]> 2019-11-12 21:04:45 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410258260 Threat (Detailed analysis) cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410260372 Increasing competition from Big 5 Banks: The Big 5 Banks in the United Kingdom - Barclays, HSBC, Lloyds Bank, Royal Bank of Scotland and Santander, are looking to increase efforts to improve their digital onboarding capabilities. Further, an increasing number of banks are looking to offer fully digital application procedures for complex products such as mortgages. Thus they will directly compete with Digitally Focused Challengers such as Starling Bank.
Customer inertia - Digitally Focused Challengers such as Starling face a number of obstacles. The first and most pressing is whether they will be able to attract customers away from their existing banks. Customer inertia, particularly in current accounts, is a big issue in the UK. Just over one million people switched current account provider in 2015 using the current account switching service, 11 per cent lower than in 2014 as per industry reports. Thus banks such as Starling will have to do more than just get a share of the switching market to be successful – it will need to create a market.]]> 2019-11-12 21:08:53 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410260372 cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410262780 2019-11-12 21:14:34 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410262780 PESTLE Analysis cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410263542 Political:
Brexit uncertainty delaying European expansion
Economical:
The slowdown in UK economic growth
Social:

Millennial ready to adopt digital financial services with flexible features
Trust and security – a critical factor for success in banking

Technological:

Predictive intelligence and commercialisation of data
Increasing cybersecurity concerns

Legal:

Open banking regulations in the UK and Europe
General Data Protection Regulation in Europe

Environmental:
Focus on environmental sustainability to increase customer loyalty

]]> 2019-11-12 21:16:23 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410263542 PESTLE Analysis (Detailed) cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410267662 Political
Brexit uncertainty delaying European expansion: Starling aims to enter key European markets as soon as Brexit’s effects upon the UK are fully understood. Plans to form a foothold in Ireland by 2018 are also underway. Starling Bank is a member of the Single Euro Payments Area, or SEPA and follows the STEP2 and TARGET2 payment infrastructures in Europe. The bank is also testing a Euro proposition and is under the sponsorship of the Central Bank of Ireland.
Economic
The slowdown in UK economic growth: UK growth is likely to fall to around 1-1.1% in 2019 and to increase minimally in 2020 to reach 1.6%, according to analyst projections. This slow growth is a reflector of the economic and political uncertainty surrounding Brexit outcomes leading to lower business investments. This will impact new customer additions and result in slower growth for Starling Bank.
Starling Bank
Social
Millennials ready to adopt digital financial services with flexible features: Increased usage of mobile phones is a benefit to challenger banks who are not encumbered by a branch-centric business model and are completely digital. This enables them to be user-friendly and adaptable to user needs. Greater flexibility is also possible because of the digital model that they follow. As challenger banks use the latest technology, they are able to offer new products developed by third parties easily with a simple switch on their business model platform. Thus this model has become highly popular with the millennial as it is able to give them the freedom of choice which they desire.
Trust and security : a critical factor for success in banking: Even though challenger banks have a large customer base, they tend to have very few people who choose them to be their primary banks with payrolls registered. A lack of trust is the primary reason behind these low figures as people prefer established banks when it comes to putting in money. Customers remain assured that their money will remain safe in established banks if though lesser facilities are being offered. Starling bank has also faced its share of issues with problems cropping up within its app and payment systems. Security issues also remain a threat as with the case in January 2019 when a customer’s passport details had become openly accessible in the bank’s online support tool simply by typing in the specific URL. Starling needs to update its internal processes and systems to gain customer trust and market share as a primary bank account.
Technology
Predictive intelligence and commercialization of data: AI tools and predictive analytics are being extensively used by challenger banks as these can be used to determine user spending patterns and ultimately be translated into tips and alerts which can give users a personalized banking experience. By doing this Starling effectively commercializes the customer data available for free on social media and gains an advantage over other incumbent offerings.
Increasing cybersecurity concerns: In this age of increasing digitalism, cybersecurity has become a serious concern. This is especially true for data-sensitive sectors like banking that are going digital. While most banks have been working towards solving this problem for years, new technologies keep introducing additional risks to customer data. Challenger banks like Starling however, need to do more than simply fulfil all the data regulations if they are to maintain customer trust and keep us with the constantly changing data threats.
Legal
Open banking regulations in UK and Europe: New challengers within the industry are benefitting from the recent regulatory changes made in the UK as well as from EU’s Revised Payments Services Directive (PSD2) that come into effect from 2018. These and open banking give third parties full access to customers’ current account data when requested. This translates to fintechs getting a chance to create new services by accessing traditional bank data. Due to this, the industry will be seeing a spike in competition as banks will find themselves forced to share customers with the new entrants of the industry.
General Data Protection Regulation in Europe: Privacy and data ownership policies in Europe are likely to get completely rewritten due to the General Data Protection Regulation (GDPR) that offers data protection to EU citizens on an entirely new level. The ways by which financial companies and consumers’ data gets shared with IoT devices will also see an overhaul. Starling, a challenger bank, has to thus obligatorily protect customer data and also comply with all GDPR regulations. GDPR compliance is also beneficial for the bank as it promotes customer engagement and trust. With this in mind, Starling Bank is in the process of developing a section within its app which will give its customers access to all their data with a single click.
Environment
Focus on environmental sustainability to increase customer loyalty: Customer and employee loyalty, as well as sales, get positively affected by actions that are socially and environmentally positive. A study conducted by Cone Communications has shown that millennial are environmentally conscious and prefer businesses that can assist them in resolving social and environmental problems. Starling has an advantage here as it has a far smaller carbon footprint compared to other banks, owing to its digital nature. All account related processes are also much faster and paperless. Further paper saving is achieved b not posting paper statements each month. Also, all packaging used by the bank for its portrait debit cards is also recyclable, making the bank extremely environmentally friendly.]]> 2019-11-12 21:26:03 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410267662 cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410272121 2019-11-12 21:35:14 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410272121 cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410273141 2019-11-12 21:37:25 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410273141 References cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410278254
1. Starling Bank Review May 2019 | App Card Fees and Charges – https://www.finder.com/uk/starling-bank-review
2. Better banking with our mobile bank accounts - https://www.starlingbank.com/
3. Starling names new clients for banking-as-a-service offering - https://www.finextra.com/pressarticle/75809/starling-names-new-clients-for-banking-as-a-service-offering
4. Starling Bank to open second UK office, creating up to 150 tech and support jobs in Southampton - https://techcrunch.com/2019/03/11/starling-bank-southampton/
5. Starling Bank launches euro accounts - Starling Bank - https://www.starlingbank.com/news/euro-account-launch-UK-customers/
6. Starling Bank pledges to transform banking for small businesses as it is awarded £100 million grant - Starling Bank - https://www.starlingbank.com/news/rbs-cif-funding-feb2019/
7. Starling Bank starts to expand business banking Marketplace - Starling Bank - https://www.starlingbank.com/news/expanding-business-banking-marketplace/
8. Starling looks for further funding as users grow fivefold | Financial Times -https://www.ft.com/content/f6bed0b6-aa01-11e8-89a1-e5de165fa619
9. Starling Bank • Annual Report 2017 - https://www.starlingbank.com/docs/Starling-bank-annual-report-2016-17.pdf
10. Telegraph-article-Amazon of Banking - https://www.telegraph.co.uk/business/2018/10/09/starling-now-amazon-banking-come-get-account/]]> 2019-11-12 21:50:25 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410278254 Starling Bank Porter's five forces (Detailed analysis) cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410356005 and Threats of New Entrants

New entrants into the challenger bank industry bring innovation, new choice and services which put pressure on Starling bank through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Starling bank has to manage all these challenges and build effective barriers to safeguard its competitive edge.

How Starling Bank can tackle the Threats of New Entrants

By innovating new products and services. New products not only brings new customers to the fold but also give old customer a reason to use Starling Bank's Service.
By building economies of scale so that it can lower the fixed cost per unit.
Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Starling Bank keep defining the standards regularly(voted the best bank in Britain twice). It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.

Bargaining Power of Suppliers

Almost all the companies in the fintech industry buy their raw material from numerous suppliers. Suppliers in a dominant position can decrease the margins Starling bank can earn in the market. Powerful suppliers in fintech sector use their negotiating power to extract higher prices from the firms in fintech field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Software & Services.

How Starling Bank can tackle Bargaining Power of the Suppliers

By building efficient supply chain with multiple suppliers.
By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.
Developing dedicated suppliers whose business depends upon the firm. With the amount of customer the bank already have Starling Bank will have strong bargaining power with their suppliers such as Bacs and faster payments which is their direct debit and the instant payment provider.

Bargaining Power of Buyers

Buyers are often a demanding lot. They want to receive the best service available while paying the minimum price as possible. This might put pressure on Starling bank profitability in the long run. The smaller and more powerful the customer base is of Starling bank the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.

How Starling Bank can tackle the Bargaining Power of Buyers

By building a large base of customers. This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.
By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Starling Bank keep on coming up with new products then it can limit the bargaining power of buyers.
New products will also reduce the defection of existing customers of Starling Bank to its competitors.

Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Starling Bank and Monzo are both offering GBP and EUR debit card services. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

How Starling Bank can tackle the Treat of Substitute Products / Services

By being service oriented rather than just product oriented.
By understanding the core need of the customer rather than what the customer is buying.
By increasing the switching cost for the customers.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Starling Bank operates in a very competitive fintech/challenger bank industry. This competition does take a toll on the overall long term profitability of the organization.

How Starling Bank can tackle Intense Rivalry among the Existing Competitors in Fintech/challenger bank industry

By building a sustainable differentiation
By building scale so that it can compete better
Collaborating with competitors to increase the market size rather than just competing for small market.

]]> 2019-11-13 02:14:10 UTC https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410356005 Starling Bank Porter's five forces cheuk_cheung_2018 https://padlet.com/cheuk_cheung_2018/q92puby4yg5m/wish/410356680 _{Threats of New Entrants:}

_{New entrants into the challenger bank industry bring innovation, new choice and services which put pressure on Starling bank through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Starling bank has to manage all these challenges and build effective barriers to safeguard its competitive edge.}

_{How Starling Bank can tackle the Threats of New Entrants}

_{By innovating new products and services.}
_{By building economies of scale so that it can lower the fixed cost per unit.}
_{Building capacities and spending money on research and development.}

_{Bargaining Power of Suppliers:}

_{Almost all the companies in the fintech industry buy their raw material from numerous suppliers. Suppliers in a dominant position can decrease the margins Starling bank can earn in the market. Powerful suppliers in fintech sector use their negotiating power to extract higher prices from the firms in Software & Services field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Software & Services.}

_{How Starling Bank can tackle Bargaining Power of the Suppliers}

_{By building an efficient supply chain with multiple suppliers.}
_{By experimenting with product designs using different materials}
_{Developing dedicated suppliers whose business depends upon the firm.}

_{Bargaining Power of Buyers:}

_{Buyers are often a demanding lot. They want to receive the best service available while paying the minimum price as possible. This might put pressure on Starling bank profitability in the long run. The smaller and more powerful the customer base is of Starling bank the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.}

_{How Starling Bank can tackle the Bargaining Power of Buyers}

_{By building a large base of customers.}
_{By rapidly innovating new products.}
_{New products will also reduce the defection of existing customers of Starling Bank to its competitors.}

_{Threats of Substitute Products or Services}

_{When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Starling Bank and Monzo are both offering GBP and EUR debit card services. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.}

_{How Starling Bank can tackle the Treat of Substitute Products / Services}

_{By being service oriented rather than just product oriented.}
_{By understanding the core need of the customer rather than what the customer is buying.}
_{By increasing the switching cost for the customers.}

_{Rivalry among the Existing Competitors}

_{If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Starling Bank operates in a very competitive Software & Services industry. This competition does take a toll on the overall long term profitability of the organization.}

_{How Starling Bank can tackle Intense Rivalry among the Existing Competitors in Fintech industry}

_{By building a sustainable differentiation}
_{By building scale so that it can compete better}
_{Collaborating with competitors to increase the market size rather than just competing for small market.}

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