Starling's Profit Dip And The Plan To Fix It

Hey FinTech Fanatic!

Bernadette Smith, appointed to lead Starling's banking operations in June, sat down with City AM just six weeks into the role.

Pre-tax profit fell 3% to £217m last year, and revenue slipped 5.6% as falling interest rates exposed how dependent Starling still is on net interest income.

Three things stood out to me from the interview 👇

Smith is moving fast. At least one new product or feature has shipped every week since she joined, from travel eSIMs to business expense cards. Velocity, she argues, signals to the market that something real is happening.

Diversification is the whole game now. The revenue slide is a direct consequence of not having enough non-interest income, which is the same structural challenge Revolut and Monzo have been solving for years. Starling is late to that race.

And Smith's definition of success is refreshingly direct: "I don't want a dip in profit, I want a healthy improvement in profit."

Starling has the brand and the balance sheet, now is going all-in on product diversification.

Here's what else landed today in FinTech 👇

We're back at it on Monday. See you then!

Cheers,

Marcel

INSIGHTS

🎥 Incognia: AI, deepfakes and the new battleground for digital identity. André Ferraz and Eduardo Pires on why liveness detection can't keep pace with generative AI and how grounding identity in the physical world can. Watch the full session here 

FINTECH NEWS

🇬🇧 Starling plans to 'come out swinging' in diversification bid, says new chief banking officer Bernadette Smith. The neobank saw pre-tax profit dip 3% to £217m last year and is now launching at least one product or feature per week to rebuild momentum.

🇺🇸 PayPal puts revenue targets on key units as CEO reviews strategy. New CEO Enrique Lores plans to break out results for its three main businesses for the first time, giving investors clearer visibility into each unit's potential.

PODCAST RECOMMENDATION

🎤 AI's economics don't add up yet by DashDevs. In episode 164 of FinTech Garden, Igor Tomych speaks with author and keynote speaker Eleftherios "Jerry" Floros about the money behind the AI boom, the energy and water constraints already stalling data centre projects, Europe's push for sovereign AI, and the regulatory guardrails he argues are now overdue. Watch the full podcast here 

PAYMENTS NEWS

🇺🇸 Klarna goes live with J.P. Morgan Payments, opening its flexible checkout options to a broader base of U.S. merchants. The integration allows merchants using J.P. Morgan's payment infrastructure to offer Klarna's pay-now, pay-later, and financing options directly at checkout without additional technical lift.

🇨🇭 Payrexx launches a branded payment terminal range with Newland NPT, bringing a new line of co-branded hardware to market for Swiss merchants. The terminals are designed to integrate directly with the Payrexx platform, giving merchants a unified software and hardware payments stack under a single provider.

🇩🇪 norisbank introduces Wero, the EPI-backed digital payment solution enabling instant transfers without IBAN or BIC. The Deutsche Bank subsidiary joins the growing roster of banks adopting Europe's sovereign mobile payment network.

🇮🇳 PhonePe launches Fixed Deposit distribution in partnership with leading banks and NBFCs. Users can compare and book FDs directly in the app, alongside a first-of-its-kind Daily Recurring Deposit product starting at just ₹100 per day.

BLOCKCHAIN/CRYPTO NEWS

🇺🇸 Circle officially opens its national trust bank, going live on July 24 with both an OCC charter and a New York trust charter. The company also confirmed it will publicly launch its open blockchain network Arc on Sept. 16.

🇮🇪 Irish arm of Binance posts €26m gross profit, but records a €99m net loss as impairments bite. Newly filed 2023 accounts for the cryptocurrency exchange's Irish subsidiary reveal the scale of write-downs across multiple units.

🇦🇺 Coinbase Australia launches perpetual contracts, expanding its derivatives offering in the region. Eligible Australian users can now trade perpetual futures directly on the Coinbase platform. 

🇨🇭 Swiss-based Taurus gives banks access to Hedera via unified digital asset platform. Over 40 institutions, including Deutsche Bank and State Street, can now custody, stake HBAR, issue tokens and deploy smart contracts. 

DIGITAL BANKING NEWS

🇳🇱 ABN AMRO and Mistral AI enter a strategic partnership to strengthen European AI innovation, with the Dutch bank becoming one of the first financial institutions to deploy Mistral's models at scale. The collaboration will see ABN AMRO integrate Mistral's AI capabilities across its operations, spanning customer service, compliance, and internal tooling.

🌏 FIS launches Digital One Commercial to help APAC banks scale business banking across growth markets. The cloud-native platform targets mid-market and SME segments, enabling banks to deploy commercial banking services faster across the Asia-Pacific region.

🇵🇰 HugoBank receives SBP nod for pilot operations, marking a key regulatory milestone for the Pakistani digital bank. The State Bank of Pakistan approval clears HugoBank to begin limited live operations under supervised conditions.

🇺🇸 Chime reports its second quarter 2026 financial results, offering a fresh look at the neobank's trajectory ahead of its anticipated public listing. The company disclosed its Q2 2026 performance metrics as it continues to build its public market profile following its IPO filing earlier this year.

🇨🇿 iDenfy integrates Czech Bank iD to streamline digital onboarding in Central Europe. The integration allows 5 million Czech citizens to verify identity via bank logins without scanning physical documents.

🇺🇸 The SOLO Network announces a Bank Reliance Pilot for reusable customer verification, coordinating with the U.S. Department of Treasury, FinCEN, OCC, and the FDIC. The pilot explores how banks can share verified customer identity data across institutions to reduce duplicative onboarding and streamline compliance across the financial system.

PARTNERSHIPS

🇦🇪 Mastercard collaborates with AFS to launch corporate credit and prepaid cards in the UAE and Egypt. The partnership expands commercial card access for businesses across two key Middle Eastern and North African markets.

🌎 Borderless.xyz and Mastercard to test cross-border stablecoin payment flows. The pilot will route real-time stablecoin settlements across Mastercard's global network to validate speed and compliance at scale.

🌎 Unlimit and Xiaomi GetApps expand partnership to help game studios scale payments and distribution worldwide. The expanded deal enables developers to accept payments and reach players across more global markets through the GetApps platform.

🇺🇸 Fiserv and Stuut partner to bring agentic AI to enterprise receivables. The collaboration combines Fiserv's Commerce Hub and SnapPay with Stuut's AI automation to streamline B2B collections and cash application.

🇧🇿 Belize Bank partners with Backbase for nation-scale AI-native digital banking transformation. The six-year deal aims to bring instant self-service and AI-powered banking to over 100,000 customers in Belize.

🇺🇸 Nuvei partners with agentic financial operations platform BlackLine, embedding payment acceptance directly into BlackLine's invoice-to-cash workflows. Enterprise customers can now settle invoices instantly with automatic reconciliation.

🇺🇸 Lithic and Lightspark partner to power a global card program on stablecoin settlement rails. The Visa network card program settles in USDC, with account balances held natively in stablecoins and converted to local currency at the point of spend.

🇧🇹 Bitget partners with Bhutan's GMCA to launch regulated crypto business. The agreement with the Gelephu Mindfulness City Authority positions Bitget to operate a licensed crypto exchange within Bhutan's special administrative zone.

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