The news: Starling will expand its banking as a service (BaaS) business to continental Europe, per AltFi. The UK neobank’s initial markets will include France, Germany, Spain, and the Netherlands.

• Its French expansion, first reported by Les Echos, is slated for 2022 and already includes a hiring push.
• The neobank made its initial BaaS entry in 2018 in its home market—and clients now include financial services companies like Raisin, MoneyBox, and CurrencyCloud.

More on this: Starling CEO Anne Boden outlined her vision for her company’s BaaS offering—she calls it Starling as a Service—in a “letter to herself” within a LinkedIn post.

• Boden views the BaaS market opportunity as vast, citing the retail, healthcare, utilities, and manufacturing industries as sectors that could benefit from Starling’s product.
• She stressed how the neobank can benefit businesses that embrace its BaaS product, pointing to advantages in convenience, cost, and complexity.
• Boden also noted that Starling can take on the cumbersome tasks of adding financial services—like anti-money laundering and know your customer regulations—while clients only need to roll out the features.

Trendspotting: Starling’s expansion is the latest case of a financial services firm moving into—or branching out within—the BaaS market:

• Fellow UK neobank Monese announced earlier this month that it’s jumping into BaaS, with customization choices for clients in various countries.
• French standalone BaaS provider Swan revealed thart it raised Series A funding to power pushes into multiple European markets.
• Australian neobank Volt has shifted focus to BaaS amid upheaval in the country’s consumer neobanking market.

The big takeaway: Neobanks like Starling can deploy BaaS for areas in which they have experience—like core banking technology and regulatory maneuvering—without having to establish a front-end user experience.

This could also result in their creating a promising line of business with established non-financial companies. For example, a 2020 survey from Capgemini and Efma shows that banking customers are interested in having access to banking products from healthcare providers, big tech companies, and retailers.