I have long been a person who was unhappy with the status quo of high street banks, they lacked vision and innovation. Furthermore they are slow and cumbersome thanks to deep rooted tradition and procedure from a bygone era of banking that grew from ledger books, cheques, and carbon paper. The advent of modern "fintech" so called challenger banks was a welcome breath of fresh air, however I am learning that with that breath of fresh air comes some downsides, particularly when it comes to my experience with Starling Bank.

First impressions are fairly good

Switching to Starling Bank was a breeze, it was extremely quick and simple to apply and the onboarding process was nothing short of delightful, down to the incredibly high quality card stock envelope the debit card arrives in. Overall you can feel the difference immediately when opening an account with Starling, it is nothing at all like a high street bank where you are trudging into town with a stack of papers and dug out council tax bills, it is done in literal minutes. But that does not mean there aren't some annoyances.

You must have a personal account

The first thing I found frustrating is that in order to have a joint account, one must first have a personal account for just yourself. Of course this may not apply to all couples but I didn't see the purpose in having a single account that I wasn't going to use just for the purpose of having a joint account whilst that other account sits their dormant. I really don't see this is necessary at all and would have preferred to have just been able to open a joint account from the start and skip a personal account.

To open a business account be prepared to lie

Opening a business account can be an interesting experience that may well result in Starling Bank telling you to lie to Companies House or to themselves.

To clarify, to open a business account the directors being entered to be on that account must match the "Persons of Significant Control" (PSC) at Companies House, if you were to have a PSC that is not a person and is perhaps another holding company then the Starling application process is going to fail and tell you that they don't support banking for your type of company. However if you then go on to ask them for support they'll suggest you update Companies House to have human only PSCs at Companies House to open the bank account then put them back again once the bank application is complete... just let that sink in. The bank is telling you to lie to Companies House on a statutory filing in order to fudge through their clunky application process. Not ideal, maybe not even lawful.

Don't even get me started on how difficult it can be to open a second business account, good luck, the app does not make that easy at all.

Cryptocurrency? No.

Man holding a physical Bitcoin

Ah the bug bear of banking, cryptocurrency. Some banks simply don't support it, and that is fine, banks are allowed to have things like that I suppose, a business can conduct itself how it sees fit (within reason) but that is dependent on letting customers know. Starling Bank does not support cryptocurrency, if you want to go and buy some Bitcoin on Coinbase, the payment will be declined.

This in itself I don't have a problem with necessarily, what I have a problem with is that this arbritrary rule isn't documented anywhere. If you ask support they'll tell you that Starling Bank don't support cryptocurrency related payments, but if you ask where the account terms and conditions it says this they can't tell you. Nowhere in the T&Cs does Starling Bank inform customers that there are restrictions of this type on their account, so the first someone knows about it is when a payment is declined.

I am not going to get into the irritating distrust that banks have with cryptocurrency, the issue here is that Starling Bank has taken it upon themselves to prevent their customers spending money on a particular thing without telling them. This isn't ok, if Starling Bank want to ban customers from purchasing from a particular vendor then they should make that clear in the terms and conditions.

Gambling restrictions are good, arbritrary rules less so.

Starling Bank also offer some controls to help those who struggle with gambling, which in itself is a great idea. In my case however I found that Starling Bank had enabled these controls without my knowledge, and then when I went to buy a lottery ticket for a Euromillions super jackpot I could not. When I went to turn it off, the lock I hadn't enabled, I was told it would take 48 hours.

Gambling controls in the Starling Bank app

Now, I understand why a time delay disabling a control like gambling restrictions is a good idea. However firstly I didn't enable the gambling lock, but secondly the 48 hour delay is not detailed in their terms and conditions. The only place that mentions the 48 hour delay is their blog. A blog is not somewhere to publish what are in essence terms on what I can and cannot do with my own money.

Maximum withdrawal amounts

The other frustration with an app based bank is that there is utterly zero flexibility, they are driven by what the machines they created say. It is ironic that I started this blog talking about the rigid dependence of incumbant high street banks on the old ways of banking, but conversely the old ways of banking also include a bank manager in a branch able to use his discretion to meet your financial needs.

In the past when I've needed to withdraw a large sum of cash and been nervous about making a verbal request at a counter I have been able to call the branch and pre-warn them so they are ready for me and it doesn't look like I am robbing the place handing over a note with a sum of money on it. With Starling Bank, and presumably all modern so called challenger banks no such flexibility exists as they are dependent on places like Post Office and PayPoint to manage their deposits and withdrawals.

Withdrawing cash day after day accumulating dangerous piles in your home.

At Starling Bank you can withdraw £300 a day in cash, if you need to pay somone a large sum in cash like perhaps a builder who often prefer cash (for reasons we won't get into) then you are stuck. Like me you're going to have to annoy a Post Office for weeks on end going every day you can to withdraw the maximum amount then having it sat around in your home at risk accumulating until you have enough. Of course thanks to being forced to open personal accounts in addition to a joint account you could always transfer £300 to each personal account and withdraw £900 per day instead on three different debit cards, but still that restriction is frustrating and seemingly set in stone with no way around it.

Challenging challenger bank

In summary, Starling Bank is on the surface a good bank with lots of innovative features that certainly lives up to the name of challenger bank, but I believe it is a challenger bank only in that it challenges high street banks to up their game and innovate whilst maintaining their strength steeped in their histories and traditions.

Starling Bank is a frustrating bank to deal with, whilst in many every day uses it is a delight to work with, it is frustrating and jarring to have that generally good experience be disrupted by frustrating surprises and inflexible barriers such as withdrawal limits and arbritrary spending restrictions. It should not be the case that a bank can arbitrarily stop you from spending money without warning and without anything in their terms just a blog post. It should also not be the case that customers are forced to withdraw money in small amounts whilst accumulating dangerous piles of cash rather than arranging to withdraw what they need and then paying whoever they are paying quickly and removing that risk to themselves.

Starling Bank and other banks like it have already had a marked impact on traditional high street banks and forced them to up their game. Whilst shiny apps can be tempting, the challenger banks just don't have the scale and ability to provide true whole of life banking solutions like a large high street bank can. Nor might I add can a bootstrapped challenger fintech bank offer tempting interest rates and other products of genuine financial benefit to their customers. I would say, don't be tempted by Starling Banks polished app and extensive advertising campaigns, instead look for a bank you can trust and depend on and bank with them, certainly not a bank that arbritrarily tells you what you can and cannot spend your own money on.

Personally I am going to move away from Starling Bank and see what other banks have to offer, I haven't written off new challenger banks yet, but I've certailny written off Starling Bank.