The online bank, highlighted by a former government minister for the effectiveness of its anti-fraud measures, “included” an average of 15,000 new customers a month during the Covid crisis, according to an Observer analysis.
Data from Starling Bank’s latest annual report show that the eight-year-old lender increased its business customer base from 87,000 before the pandemic to 330,000 business accounts last spring.
The law requires banks to conduct rigorous inspections of new customers to prevent fraud and money laundering.
An analysis of the bank’s annual report, confirmed by Starling, shows that it accepted up to 243,000 new customers – an average of more than 15,000 per month – between November 2019 and March 2021. This was despite having only 1,245 employees, only some of them would check for potential problems.
The number of new accounts is much higher than that of the largest creditors in the United Kingdom. Sources at some of these banks have confirmed that they typically accept between 1,500 and 8,000 new business customers a month.
Starling said she took advantage of the Covid blockade when most major creditors closed their branches and struggled to keep up with existing customers. The digital lender said the technology allows it to engage new customers, including those looking for government-backed Covid loans, at a pace that larger banks relying on older technology could not manage.
But the volume of new customers, as well as the jump in loans distributed by Starling during the pandemic, raised questions about its ability to conduct proper inspections.
Last month, the bank was accused by former Lord Lord Agnew of failing to properly screen borrowers before distributing tax-backed loans, although Starling CEO Anne Boden has since threatened to take legal action against the partner. tori for what she said. were “slanderous statements.”
Kevin Hollinrake, chairman of the All-Parliament Group on Fair Business Banking, said Starling had questions to answer. “Public control must always accompany public money. “Although I have not yet seen conclusive evidence of improper lending, Starling urgently needs to answer many valid questions, including his current and future default rates and fraud on government-secured loans,” he said.
Prior to the pandemic, Starling had disbursed only £ 23 million, excluding loans bought from other companies. By June 2021, according to an update on the company’s trade, it had disbursed £ 1.6 billion in loans. The scheme, introduced by Chancellor Rishi Sunak, offered up to £ 50,000 per client. The loans are distributed by major banks, which charge interest – albeit at a reduced rate of 2.5% – in exchange for the distribution of money, but the taxpayer is required to repay 100% in the event of default.
Starling, founded by Boden, former CEO of Royal Bank of Scotland and Allied Irish Banks, in 2014, said its systems are designed and built to routinely handle customer volumes at this and higher levels. A spokesman said it had “one of the best banking platforms in the world that we built from scratch” and that its systems “are designed and built to routinely handle customer volumes at this level and much higher.”
Each loan application has been screened for fraud alerts, Starling said, claiming it has placed more control than many other lenders and more than the scheme requires. It states that, as an example, it automatically checks applicants for reimbursement in the register of companies by checking the date of incorporation of the company.
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