Starling bank pulls Irish Bank application

There is obviously something fundamentally broken in the Irish financial system that prohibits new entrants or even those outside of the Big Two from operating successfully in this country. Be it a weakness at regulatory level, that the average Irish person is so set in their ways that they won't change bank regardless of home much each quarter they are being robbed in charges or something else is at play.

I do know, having changed banks recently, that the amount of pfaff, red tape and hoops that must be jumped through are a clear impediment to account mobility. The contrast with changing utility is stark.
 
tallpaul said:
There is obviously something fundamentally broken in the Irish financial system that prohibits new entrants or even those outside of the Big Two from operating successfully in this country.
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The Irish market is no different to the rest of Europe. Banking has become a commodity industry and most banks be the digital or brick based are loosing money. And consequently banks are closing branches, exit markets and even asking non profitable customers to leave. And like every other commodity industry this will continue until we get to the point that banks can once again start charging decent fees again.

tallpaul said:
I do know, having changed banks recently, that the amount of pfaff, red tape and hoops that must be jumped through are a clear impediment to account mobility. The contrast with changing utility is stark.
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You can't contrast it with utilities because utilities are not in a position to facilitate money laundering and their profitability depend on customer! The regulatory frame is the same for everyone right a cross Europe. But when you are likely to make less than 50 Euros from a customer there is little point investing much in the process and the last thing you want to is facilitate mobility in any case.
 
I don't think there is anything particularly wrong with the system here

The population is very small and younger people (and not so young) have embraced digital banks.

Others have too much blind loyalty to the pillar banks.

I suspect that they looked at the costs of acquiring customers and setting up their systems and could not see a decent return especially as non bank lenders are strong in the mortgage market.

So digital banks taking the standard accounts, non bank lenders taking a good proportion of the mortgage market - what's left to target?

As for opening an account - once you have the standard identity requirements to hand you can open a Bunq account in a few minutes.
 
Hummm...

So, now we've a second digital bank that was going through a very lenghty process with the Irish Central Bank, and subsequently decided to throw in the towel.

Coincidence, or something more?

It'll be interesting to see how long it is before Starling Bank has a Banking licence from another EU member state (be it through acquisition, or direct application).

There's no doubt in my mind, that this is a loss for the Irish consumer.
 
They were 4 years into a process of obtaining a Banking Licence that would not only allow them to offer services to Irish customers but also passport into other EEA countries.

Based on the press release it appears they aren't going to pursue a licence elsewhere but are changing their business strategy. Perhaps in the current environment they might get a licence through acquisition.

"We'll now be focusing on taking our software to banks around the globe through our Software as a Service subsidiary, Engine, and by expanding our lending across a range of asset classes, including through targeted M&A activity," Ms Boden said in the message to staff.
 
NoRegretsCoyote said:
I'm old enough to remember what happened when the Central Bank was too lax as a supervisor
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But it's still slamming the door shut after the last crisis almost 15years ago rather than dealing with today's banking issues.
Two major banks are already leaving and a third small digital bank had baulked at entering
I wonder are the legal issues and decisions made by the courts recently regarding debt write offs and people allowed to keep million pound properties and farms alot to do with it, while having huge debts written off

It's just too risky for banks to lend out money in the Irish market now. Therefore banks won't enter this market
 
The banks themselves massively to blame also for their poor decisions and their abysmal management teams which led to customers defaulting and subsequent court decisions. Courts right to thwart the banks for above factors alone & find in favour of these defaulting debtors.
 
joe sod said:
wonder are the legal issues and decisions made by the courts recently regarding debt write offs and people allowed to keep million pound properties and farms alot to do with it, while having huge debts written off
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While our legal system fails us badly (in many ways, not just when it comes to enforcing debt repayment etc.), I think this has been well known to all, for a long time, so don't think that's the cause of Startling cancelling its plans.
 
MrEarl said:
While our legal system fails us badly (in many ways, not just when it comes to enforcing debt repayment etc.), I think this has been well known to all, for a long time, so don't think that's the cause of Startling cancelling its plans.
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It has gotten considerably worse in recent days.

Farmers cannot be forced to sell land to clear debts following landmark insolvency ruling

A significant High Court ruling means heavily indebted farmers can avail of personal insolvency arrangements (PIAs) to avoid the forced sale of their land.
www.independent.ie

 
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We have higher reserve requirements than other countries, a smaller market, and a notably painful system for repossessing properties in severe arrears. The on top of that we have high levels of customer inertia. Even when we had 5 or 6 players in the market, only a very small % of customers actually changed banks.
 
The Irish times said that the Central Bank had all but approved the license and had informed Starling that an official approval was forthcoming.
Link

So maybe it is a change of direction for their business model and nothing else.
 
Hummm..... The Central Bank found itself under the spotlight, after what happened with Revolut, so I find myself wondering about that article, and where the Central Bank was really at with Starling's application, if I'm being honest.
 
MrEarl said:
Hummm..... The Central Bank found itself under the spotlight, after what happened with Revolut, so I find myself wondering about that article, and where the Central Bank was really at with Starling's application, if I'm being honest.
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I think it will be telling what Starling does next. If it opens a bank elsewhere in Europe then blame rests with the regulator. If they don't open anywhere in the EU then it's down to the bank
 
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