Starling Bank’s Anne Boden: ‘I was ashamed to be a banker’

Consider the world’s biggest financial technology companies and their founders — Vlad Tenev, Baiju Bhatt and Robinhood, the Collison brothers and Stripe, Jack Dorsey and Square (now Block). There’s a pattern: these are hard-charging companies, founded by sleek hipsters and geeks, all of them youngish men, most of them California-based.

And then there is Anne Boden: a 62-year-old Welshwoman who in her mid-fifties reinvented herself from corporate ladder-climber into an all-or-nothing entrepreneur. If tech founders are iconoclasts, then Boden is perhaps the most iconoclastic of all.

Starling, the digital-only bank she founded eight years ago, is mould-breaking too. It has been stealing customers from big lenders, turning a profit and is a rare British “unicorn” in the fintech industry, worth £2.5bn at its most recent fundraising, giving Boden herself a net worth of about £125mn.

Boden and I have crossed paths at industry events before but have never really conversed. She has been described to me as “brilliantly determined” and “quite difficult” by peers and former colleagues (the negative characterisation she will later ascribe to sexist stereotyping).

Thanks to Tube delays, I’m a few minutes late for our Lunch in north London’s pretty Primrose Hill. Boden is already ensconced in her favourite corner window seat at Odette’s. “A bit of Starling was built out there,” she says, pointing to the pavement terrace. Primrose Hill is hardly Palo Alto, or even Shoreditch, but the playbook is similar. “Building Starling, I used to sit there in the evening, have an early supper and work away on my laptop.”

Boden has also picked Odette’s in homage to our shared Welsh roots. She hails from Swansea, I’m from 20 miles further east and Odette’s owner-chef, the celebrated Bryn Williams, is a Welsh-speaking north Walian. (We both lament the fact that Welsh-speaking died out in our own families a generation or two ago, when aspiration for many people meant anglicisation.)

Boden’s ambition marked her out early. “My father would say I could do absolutely anything, there was no pressure on me.” And what was her response? “What I said was: ‘Can I go to Uplands bookshop to buy some more books?’”

Her otherness was rooted, too, in the home where she grew up — on the edge of a council estate but in a smart if modest private house. It was a “very aspirational” working-class home, she says. “My father was in the second world war and he spoke Italian from being in Italy. So every summer, we hitched the caravan and went to Italy and all round Europe.”

Boden went on to take what was then a cutting-edge tech and chemistry degree at Swansea university. “I’d always been in a house where I was encouraged to do techie things,” she says. “My dad initially wanted me to become a metallurgist” — which sounds zany, until you combine her natural instincts with her father’s job as a tool setter in the local steel factory.

We order and our starters arrive swiftly — for me, a rich artichoke mélange with savoury churros on the side; for her, crab crackers.

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Boden’s route to fintech pioneer began back in 1981, when she got a graduate traineeship at Lloyds Bank. It wasn’t called “fintech” back then, but that’s precisely what she was doing when she joined the bank as part of its first intake of computer specialists. Within three years, she’d been drafted into a small team working with the Bank of England on replacing outdated telex-based payment transfer technology. That was the start of the Clearing House Automated Payment System, or Chaps, still core to UK banking today.

As the City of London boomed in the late 1980s in the heady days of Big Bang regulatory liberalisation, Boden began studying part-time for an MBA. A spell at PwC (“consulting was not really for me”) was followed by a switch to Aon and the Lloyd’s of London insurance market. “That environment is not used to having women,” she says of the Lloyd’s she knew in the 1980s. “The socialising is meant for men and not for women. When you’re in your career, you can’t say anything.”

But she’s keen now to revisit the topic. “I’m in a very fortunate position. I can say things, and I can call things out: the City is sexist.” She won’t expound further on her experiences at Lloyd’s, despite my three attempts to coax details from her — though she doesn’t dispute the reports of bawdy drinking games, prostitutes at dinners and drug-taking that I’ve heard from others.

So how did she deal with such an uncomfortable environment? “I didn’t. I just worked, right?” she says, adding the interrogative Welshism for the first of a dozen times during our Lunch. “So, my way of dealing with it was, everybody else would go out and I’d stay in the office and work.” Did that not give her a reputation for being boring, or aloof from the team? “I think it’d be a reputation of really knowing the facts the following morning,” she says, with a flicker of irritation.

We turn up for a meeting with an investor in Silicon Valley and there’s people playing ping-pong, and they look at us and go: ‘What on earth’s going on here?’

Another career switch was imminent, though. And again Boden found herself part of a seminal moment in the history of modern finance. She was back in a banking role, this time at ABN Amro in Chicago, in a globetrotting job she loved. But by 2007, Fred Goodwin, then the growth-hungry boss of RBS, had spoilt the party, buying the Dutch lender, blowing up the combined group and being forced the following year into a bailout by the British government. “It was a big culture clash. ABN was very international, very broad-minded, intellectually interesting. [But] RBS is a very narrow organisation.” The deal, she is convinced, was always destined to fail.

Along the way, Boden was presented with one of the toughest management challenges of her career: explaining the implications of the group’s bailout to employees. “I had to stand in front of junior staff that had been in their jobs for 10 or 20 years and tell them that they’d been putting their bonuses every year into RBS stock and it was worthless. And then, in the afternoon, I’d have a conversation with an investment banker who complained about his bonus. And I was ashamed to be a banker.”

After the challenge of trying to manage a part-nationalised bank, her next move was from frying pan to fire — helping to run Ireland’s then all-but-defunct Allied Irish Banks, which had been at the forefront of the country’s boom-to-bust property lending drama. It didn’t last long. “I came to the conclusion that it was almost impossible to turn these banks into profit. Culturally, technology-wise, it was too difficult. And I started thinking about it: somebody should start a new bank. I could start a new bank. Then I started Starling.”

She says it casually. But when Boden first resolved to ditch a 30-year career in high finance, she had no idea that all the sexism she’d experienced would pale next to the challenges of her new chosen mission. Boden was used to prospering as an outsider. Now she really struggled.

Her long corporate career, she says, was probably seen as her biggest drawback. “People kept coming up with [that] and saying: ‘I don’t think she can do it.’” There was a good dose of misogyny and ageism, too. She recalls an early funding pitch when she and Tom Blomfield, her original co-founder (and later co-founder of Monzo), went to see prospective financiers. “We turn up for a meeting with an investor in Silicon Valley and there’s people playing ping-pong, and they look at the two of us and go: ‘What on earth’s going on here?’” Financiers doubted her but were drawn to Blomfield — a central-casting fintech founder in his late twenties.

The rebuffs might have broken someone with less resolve. “They’d look at me, a 5ft-tall Welshwoman who doesn’t look like a tech entrepreneur, and some of them will be rude to my face. I did that for two years, trying to raise the money.”

But a far more dramatic rejection was to come, after Boden and Blomfield fell out less than six months into their collaboration. The fissure was abrupt. “He said he was going, he was quitting. I think he was going to go to Chile,” Boden recalls. The company, which was on the verge of securing crucial funding, was plunged into chaos. Blomfield has said the issue was rooted in Boden’s management style, though both have been unforthcoming about details.

Boden’s way of dealing with Blomfield’s resignation was certainly unconventional. “I got everybody together,” she remembers. “And I said: ‘I’m giving you a week’s notice. And the only way this is going to [be avoidable] is if you try and convince Tom to stay.’” The mass sackings, she says, were inevitable, given that the funding injection would collapse without Blomfield in place. But why not talk privately to her key lieutenants and use them as go-betweens? Wasn’t an all-hands meeting both a sign of weakness and a sure-fire failure?

I believe technology can change the world and make it better. And I want to be part of this new brave world of technology, but I wish it wasn’t so narrow-minded

“I think I’m a very open book about things,” she says. “I don’t want to divide and conquer.” The London Business School, she tells me proudly, is doing a case study on her leadership. “They asked me the question: ‘Why did you show vulnerability, Anne, by doing that?’ I thought it would work.”

It didn’t. Everyone left the company and, under Blomfield’s leadership, set up Monzo, a higher-profile brand that today commands a higher valuation (though it is yet to make a profit).

In a rare pause in Boden’s narrative, I ask what she thought of her starter, and am struck by her seeming lack of interest in almost anything that doesn’t relate to her work. Pressed for a verdict, she judges the dish “very nice, quite tasty, with a bit of caviar in there”.

With no staff and a collapsed financing package, lesser people would almost certainly have given up on Starling. Not Boden. She revived her financing efforts — often bidding for funding against Monzo — before eventually securing the money from reclusive Austrian gambler-turned-adventurer Harald McPike. McPike has had his skirmishes with authorities: in 2014, executives at one of his companies were admonished by America’s self-regulatory National Futures Association for failing to co-operate in a prompt and timely manner with an investigation into the source of McPike’s money.

But Boden was curious. She was flown to McPike’s superyacht in the Bahamas for an investment pitch that is uncannily reminiscent of a Dragons’ Den scenario. She was looking for a £3mn investment that would value the business at £12mn. “Harry is a mathematical introvert, who is extremely detailed and spent three days grilling me on the detail. Then he offered me £48mn for 66 per cent.” She bit his hand off.

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As our mains arrive — hake for Boden and risotto for me — I switch from the micro to the macro. As someone whose entire career has been focused on tech in one way or another, what does she make of the promise of technology, the teetering valuations of Big Tech groups, the “tech bro” culture? She tells me of a senior job at Microsoft that she got close to taking a decade ago before deciding against it. “I work faster than Microsoft,” she says. On the sector as a whole, she is very much an enthusiast. “I believe that technology can change the world and make it better. And, fundamentally, I want to be part of this new brave world of technology but I wish it wasn’t so narrow-minded.”

She’s clearly peeved by tech-bro whippersnappers. “Lots of tech entrepreneurs . . . think they’re the first people to say these statements, but the rest of the world has known about it for 20 years.”

Does she have a hero in her sector? With little encouragement she begins to laud Elon Musk. “I’ve read all his autobiographies and things. Of course, he’s a fintech entrepreneur, isn’t he? I find him quite incredible, as somebody who started at PayPal and has been in all these industries. And, despite the fact that I find him incredibly annoying, I have to applaud the ambition.”

Institutionally, she thinks Google is “still clever” but Facebook “has a problem”. Starling suspended advertising on Facebook, so annoyed was Boden about the company’s alleged failure to root out “fraudster ads”. She praises Google for doing a better job of screening out non-regulated financial firms but says her calls to Facebook over the issue have been in vain. What have they said? “They haven’t returned my calls.”

We return to Starling. “Within one or two years” it will, she pledges, be generating a return on equity of more than 30 per cent — more than the world’s most profitable banks — thanks, she says, to the economics of a branchless structure with low-cost IT unencumbered by older rivals’ legacy systems. There will be more acquisitions, as Starling looks to soak up its large base of deposits, with relatively low-risk mortgage portfolios. She shrugs off suggestions that an imminent recession is a bad environment for piling into lending: loans will be backed by plenty of collateral.

Starling’s stated ambition for some time has been a public listing next year, as early backers seek to crystallise their gains — though Boden doesn’t sound thrilled about the prospect. Will the glare of a public listing be stressful? “Yes, I think so . . . I’m quite enjoying things at present. I’m in no hurry.” And has she been persuaded by the British government’s charm offensive on tech companies to list on the London Stock Exchange? Nasdaq is an option, she says. “But the default is London.”

(A few weeks after our Lunch, I check in with Boden again. Tech valuations have been gyrating, spooked by runaway inflation and the war in Ukraine. Is she upbeat nonetheless? “Starling has been defying market trends and I’m still bullish. We’re a profitable company and still growing fast.” Starling received very public criticism from former counter-fraud minister Lord Agnew, who said it had done a poor job of preventing fraud in government-backed bounceback loans during the height of Covid-19 lockdowns; the bank has described that view as “very wrong”.)

We have been eating and chatting for two hours, but there is still time for dessert. Boden plumps for the only Welsh dish on the menu: a plate of bara brith, a kind of spiced fruit bread, with cheeses. I am less patriotic, lured by a trio of mini rhubarb dishes.

We’ve already touched on the tendency of our generations to leave Wales when we reached working age, given the dearth of good employment prospects. Now she tells me how proud she is of having done her bit to improve that — creating 800 jobs in Cardiff, including coding and other high-tech roles. Her efforts to help level up the region could be the start of something far bigger, she hopes. “South Wales used to be all about the steel industry and the coal industry, and then we went through the whole era of the Japanese television companies. And then it was call centres. Why couldn’t the next era be doing something more exciting?”

Patrick Jenkins is deputy editor of the FT

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