The news: Starling Founder and CEO Anne Boden gave an overview of the company’s plans to offer banking-as-a-service (BaaS) across the world in the new year.
More on this: Starling’s overseas ambitions—previously reported in September 2021 by AltFi and Les Echos—involve plans to operate in several European countries, including Germany, France, the Netherlands, and Spain.
The same month, Boden provided a vision for Starling’s BaaS arm in a LinkedIn post.
The bigger picture: Boden’s preview of a global expansion is one of several recent examples of different companies either making a foray into BaaS or expanding within the space—leading us to speculate whether other neobanks may also eventually turn away from consumer to B2B offerings:
The opportunity: In addition to supporting other banks, Starling has a chance to make its BaaS arm into a major player in the emerging embedded finance market, in which non-financial companies can use distributed software to offer financial services.
Starling could, for instance, power future Big Tech products, should those companies want to jump into banking alongside the slew of non-financial industries that Boden enumerated. This may involve companies offering services for payments, wealth management, and lending.
Embedded finance is poised for major growth in the coming years: Lightyear Capital projected that the size of the market will balloon by 922% from 2020 to 2025, growing from $22.5 billion to almost $230 billion.