Starling Bank is looking to extend its reach in the US by offering its Engine software platform to American banks, according to Financial Times (FT), which referenced statements from the CEO of Engine by Starling.

Advisers from Deloitte and PwC have been brought on board to assist Starling in finding potential banking clients for Engine, a cloud-based system that enables financial institutions to construct their own digital banking services.

The UK fintech is aiming to engage with mid-sized banks and credit unions across North America.

In a statement to Retail Banker International, the bank confirmed its move: “We have put the infrastructure in place (team and New York office) to sell into the US market.

“The US market is home to thousands of small and mid-tier banks that are facing technology obsolescence and that would benefit from the customer-focused, cloud-native core banking solutions that Engine offers.” 

Engine operates as Starling’s Software-as-a-Service division.

The bank began licencing this technology externally in 2022. To date, Engine is in use with clients in Romania and Australia; a ten-year contract was also concluded with a Canadian client last year.

The bank also told Retail Banker International it is exploring various entry options for launching Starling Bank itself in the US, either through an acquisition or by applying for a de novo licence.

“We haven’t decided yet,” it said.

“The opportunity, as we see it, would be to have a live case study for Engine in the US (whether we re-platform an acquired bank or set up our own) and we believe that the small business market in the US is underserved by banks there today.”

In an interview to FT, Engine CEO Sam Everington explained: “The big focus this year is North America, focused on the US. The banks haven’t had the same pressure to transform their systems [which] are very static. But that is changing.”

He added: “There’s a lot of consolidation going on in the small end of the regional banking markets. So we think the time is right.”

Everington indicated that Starling is aiming to secure a deal with an American institution within the “$5bn-50bn asset range” by early next year, following discussions with several prospective clients.

The identities of these organisations were not disclosed.

In line with these plans, Engine set up a Delaware branch last year and named Jody Bhagat, previously at McKinsey, as president of its US operations.

The business plans to expand its New York office with an investment of $50m, targeting a team of 20-25 employees at that location.