Goldman Sachs-backed digital bank Starling to expand in hotly competitive Asia-Pacific market

British digital bank Starling is planning its first expansion outside of Europe, targeting a move into Asia-Pacific, CNBC has learned.

The digital lender, which is backed by Goldman Sachs, is in talks with an Asian bank about taking its Engine banking-as-a-service platform into a country in Asia, Nick Drewett, chief commercial officer at Starling, told CNBC.

Starling declined to identify the country or Asian bank, given the confidentiality of the arrangement. However, Drewett said the bank Starling is partnering would use the company’s software to launch small and medium-sized enterprise (SME) accounts, rather than to provide personal banking services.

“It’s a different proof point for us: one in Europe, one in Asia-Pacific,” Drewett told CNBC in an interview Thursday.

“We’re quite happy with the pace that we can absorb the implementation — and that will accelerate with every implementation. (…) It will never completely be cut and paste, but it will be able to accelerate as we become more material.”

Engine is a technology platform that Starling launched in March 2022 and licenses out to other financial technology firms and large banks. It is an all-in-one system that enables banks to develop their digital banking services — such as checking accounts, savings, loans, and mortgages — out of the box, rather than having to do all the digital legwork themselves.

Starling is using its Engine core banking platform as a launchpad for international expansion.

Rather than relying on a partner bank to debut its retail banking and lending services, Starling will license its technology out to lenders, enabling them to launch their own digital-only banking brands from scratch.

“We’re positioning this as a partnership, not just a software-as-a-service transaction,” Drewett said. “We recognize this is a material decision for a bank which needs regulatory approval. Our approach to it is [that] this is a long-term partnership. That resonates.”

Starling had already telegraphed its plans to expand further into Europe with Engine. The firm had originally planned to do so by launching with a bank license from the Irish central bank. It dumped those plans to focus on international expansion through its software product instead.

Starling, one of the companies featured on CNBC and Statista’s list of the top 200 fintech companies in 2023, has gone from a nimble challenger in the U.K. market to an established brand with more than 3.6 million customers, and with over 510,000 small and medium-sized enterprise customers.

Co-founded by Anne Boden in 2015, Starling was valued at £2.5 billion ($3.4 billion) in a funding round in April last year. The company has raised $1.1 billion from the likes of Goldman Sachs, Qatar Investment Partners, and Fidelity Management and Research Company.

Boden stepped down from the bank on June 30 to avoid a potential conflict of interest. She remains a significant shareholder with a 4% stake.

Watch: CNBC and Statista announce top 200 global fintech companies.