In conversation with CEO of Engine by Starling Bank, Sam Everington, he discusses the unique benefits of being a digital bank in the current space where cloud transition has become a staple for both traditional banking giants and fully mobile fintechs. Engine is Starling’s Software-as-a-Service (SaaS) branch, dedicated to deploying cloud platforms for businesses.

As a digital bank with cloud-native architecture, Starling is capable of agility and scalability that separates it from incumbent banks that were not born in the cloud. Everington notes that Starling’s flexibility allows them to adapt quickly to socio-economic needs, such as producing the Connected Card during the pandemic.

Thanks to their cloud-based infrastructure, Starling relies on a single system for the bank that is able to view connections with customers across retail and SMEs in 27 currencies in one interface. In contrast with legacy systems, which require multiple points of integration, having a single system operating on the cloud allows for real-time responses, cost-effective scalability, and enhanced customer experience.

“While traditional banks can launch these products and features eventually, their legacy architectures make such change an order of magnitude more expensive, and still constrains the resulting customer experience. This makes it much more difficult for them to deliver stand-out innovations,” Everington notes.

Having cloud-based data centres was the best option for Starling considering their pace of growth, which saw an accumulation of 3.5 million customer accounts in just six years.

As a regulated entity, Everington explains that it is a challenge to keep up with legislation and and operate successfully with the millions of transactions made daily on Starling’s platforms, and the 30-40 production releases across Engine each day.

“When you’re innovating at pace, it is critical to be compliant by design. This proactive approach will allow you to deliver on the products and features customers want or expect while maintaining compliance with regulatory requirements. A focus on, and understanding of, our regulatory obligations needs to exist across the bank, from the product and technology to front line operations.”

On advising how banks should approach cloud migration, Everington emphasises that there needs to be a platform in place designed to withstand the transition; that “lifting and shifting” to a cloud environment is not enough to gain all the value available from the transformation.

“Such change will require significant investment, and any programme should deliver real benefit to the business and its customers. Not only improved resilience and lower costs, but a step change in agility and genuine real-time processing and insights right through to the core. Choosing the right cloud provider is important, but what is even more important is working with the right partners to enable the transition.”

He continues that leveraging all the benefits of the cloud requires a shift in culture and process alongside new technologies. The hardship lies in the real, foundational change into a digital-first institution. Everington outlines that institutions in the process of migrating should focus on learning as they go and delivering high level services and products.

Everington states that choosing Amazon Web Services (AWS) as Starling’s cloud provider was an easy decision as AWS was already supporting 18 global regulatory bodies at the time the bank was established in 2014. Additionally, Everington adds that AWS’s sustainable ambitions align with those of Starling.

“Our products and features enable us to offer a stand-out digital banking experience that removes any need for physical bank branches and thus lowers our scope 1 and scope 2 emissions. Our cloud provider, AWS, is also entirely carbon offset. At Starling we have a number of initiatives and core principles that deliver on our mission to be carbon net-zero - not investing in fossil fuels for a start. Our offices also run on renewable energy, we plant a tree every time a customer refers us, and we buy carbon avoidance and sequestration credits to offset the direct and indirect emissions we create ourselves.”

On March 2nd, Finextra held its annual Financial Cloud Summit. Check out speakers and highlights of the conference here.