A decade ago, a trio of nimble fintech upstarts — Starling, Monzo, and Revolut — charged into the British banking scene with bold ambitions.

Their mission: to reimagine financial services through cutting-edge technology, superior customer experience, and sleek mobile interfaces.

Early success was meteoric. Customer bases swelled. Market share climbed. The three neobanks captured the imagination of investors and users alike, riding a wave of digital-first enthusiasm that promised to disrupt centuries-old banking norms.

Yet now, their paths are splitting.

Revolut and Monzo are enjoying record growth. Starling, once hailed as a poster child of British fintech, finds itself grappling with a brutal financial and reputational reckoning.

Starling’s stumble amid regulatory woes

Starling’s annual results revealed a sharp decline in profitability, with post-tax profit falling to £223 million in 2024 from £301 million the previous year.

The drop was driven by surging operating costs, which climbed to £403 million from £332 million, dwarfing its modest revenue increase of £32 million to £714 million.

The firm’s slide came to a head after the Financial Conduct Authority (FCA) handed it a £29 million penalty for serious failings in its financial crime controls.

Between September 2021 and November 2022, Starling opened over 54,000 accounts for 49,000 “high-risk” customers without keeping up with necessary compliance processes.

“The measures in place to tackle financial crime did not keep pace with the growth of the bank,” said the FCA, describing the failings as “shockingly lax”.

Starling was also forced to absorb potential losses from loans issued under the government’s Bounce Back Loan Scheme (BBLS), setting aside a £28.2 million provision.

The loans, designed to support small businesses during the pandemic, failed to meet the criteria necessary for the government’s guarantee.

Rather than seek taxpayer reimbursement, Starling removed the guarantee and shouldered the risk.

David Sproul, chair of Starling’s board, said the company had “resolved some important legacy matters” but acknowledged the weight of the issues faced over the past year.

Internal unrest and fading momentum

Starling’s internal turbulence has not been confined to its balance sheet.

The company has faced staff unrest following new chief executive Raman Bhatia’s directive requiring workers to return to offices at least ten days a month — despite reportedly lacking the space to accommodate them.

The policy, which came after Bhatia took over in 2024, led to a wave of staff departures.

Meanwhile, the customer growth that once defined Starling’s rise has slowed. The number of accounts rose by just 10% to 4.6 million — half the rate of the previous year.

In contrast, Monzo’s customer numbers surged 31% to 9.7 million in 2024, with deposits climbing 88% to £11.2 billion.

An annual report is expected soon, but the neobank is already drawing attention for another reason: a planned £6 billion listing on the London Stock Exchange, marking one of the UK’s most anticipated IPOs of the year.

Revolut hits profitability milestone

Revolut, once the most controversial of the trio, has emerged as the biggest winner in recent months.

The company not only surpassed 50 million customers globally but also posted more than £1 billion in profit this year — a staggering milestone for a firm that has long battled regulatory delays and governance questions.

The achievement puts it ahead of even HSBC in terms of customer numbers, highlighting the dramatic shifts underway in the banking landscape.

Revolut’s international expansion, aggressive product launches, and diversified revenue streams have helped it defy many of the scaling challenges plaguing rivals.

Can Starling’s Engine restart growth?

Faced with these challenges, Starling is now betting on Engine, its software-as-a-service (SaaS) subsidiary, to turn the tide.

Although Engine contributed just £8.7 million to group income in the last financial year, this represented a 284% jump.

The firm has now set its sights on the United States, with Bhatia describing North America as a “huge opportunity” and targeting revenues of £100 million in the medium term.

John Cronin, founder of Seapoint Insights, questioned whether Engine alone could save Starling’s wider business model.

“Starling has no choice but to move up the risk curve – and this isn’t something we learned today or yesterday either,” she said in a City AM report.

“Its limited scale and consequent lack of operating leverage, high risk weights (standardised credit risk modelling) and relatively higher deposit funding costs mean it just cannot compete with mainstream banks. But that cuts to the heart of the business model – what competitive advantages does Starling have?”

Starling’s service quality still highly ranked

Despite the divergence in performance, the popularity of digital-only banks continues to climb, and Starling, along with Monzo, was ranked highest for overdraft services in an independent survey, while First Direct rounded out the top five in all categories.

The survey conducted as part of regulatory obligations also placed Chase, Starling, and Monzo in the top three for overall service quality, ahead of legacy players like Lloyds, Barclays, HSBC, and Santander.

According to research from Finder.com published by The Sun in March, 40% of UK adults now have a digital-only bank account — up from 36% in 2024 and 24% in 2023.

A further 17% of respondents who don’t yet have one said they intend to open an account, including 7% within the next year.

Trustpilot scores show high levels of satisfaction among users, with Starling, Monzo, Revolut, and JPMorgan’s Chase all earning over 4 out of 5 stars.

Mobile app ratings across iOS and Android average over 4.8 stars.

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The EUR/USD exchange rate will be in the spotlight this week as the European Central Bank (ECB) delivers its interest rate decision and as the US publishes its nonfarm payrolls (NFP) data on Friday. It was trading at 1.1371 on Monday, 1.6% below the highest point this year.

ECB decision and US NFP data ahead

The EUR/USD exchange rate is slowly becoming a carry trade opportunity among investors as the spread between the US and European interest rates widens.

Federal Reserve minutes released last week showed that officials are not in a hurry to cut interest rates. Most officials believe that patience is key to observing the impact of tariffs on US inflation. 

Polymarket traders now believe that the first interest rate cut will come in September, followed by another one in December. 

The ECB has taken a different approach as it has become one of the most dovish central banks in the developed world.

It has slashed interest rates seven times, and analysts anticipate that it will deliver another 0.25% cut this week, bringing the official cash rate to 2%. Many other analysts believe that the bank will deliver another 0.25% cut later this year, bringing rates effectively to 1.75%.

The ECB is cutting interest rates because the European economy is slowing due to Donald Trump’s tariffs. At the same time, analysts believe that European inflation has moved to the 2% target.

The average consensus is that the headline Consumer Price Index (CPI) moved from 2.2% in April to 2% in May. Core inflation, which excludes the volatile food and energy items, is expected to move from 2.7% to 2.5%. 

EUR to USD as a carry trade opportunity

The implication of all this is that the EUR/USD pair has slowly evolved into a carry trade opportunity. A carry trade is a situation where investors borrow money from a low-interest-rate country and invest in a high-interest-rate country. 

In this case, European interest rates are expected to fall to 1.75%, while the US ones remain at 4.50%, giving it a spread of 2.75%. Therefore, this carry trade scenario may help to boost the struggling US dollar. 

The EUR/USD exchange rate will also react to the upcoming US nonfarm payrolls (NFP) data on Friday.

Economists expect the data to show that the economy created over 130k jobs in May, down from 177k a month earlier. The unemployment rate remained at 4.2%, while the participation rate and wages are expected to remain intact. 

EUR/USD technical analysis

The daily chart shows that the EUR/USD pair has been in a strong uptrend in the past few months. This happened after the pair bottomed at 1.01820 in January as the US dollar index surged. 

The pair has moved above the important resistance level at 1.1205, the highest swing in September last year and the upper side of the cup-and-handle pattern. A C&H is one of the most bullish patterns in technical analysis.

This cup has a depth of 9.15%. Measuring that distance from the cup’s upper side brings the EUR/USD forecast to 1.2220. For this to happen, it will need to move above the important resistance level at 1.1564, the highest point this year. Doing that will invalidate the double-top pattern whose neckline is at 1.1065. 

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China’s manufacturing PMI improved somewhat in May due to the resumption and frontloading of shipments to the US amid the 90-day tariff truce which will end in mid-August, Commerzbank AG said. 

May saw an increase in the official manufacturing PMI to 49.5, up from April’s reading of 49.0, official data showed.

In May, the production subindex rebounded to 50.7, exceeding the neutral 50 threshold after registering 49.8 in April.

Tensions rise despite truce

New export orders saw improvement, increasing to 47.5 in May from April’s 44.7.

Similarly, overall new orders experienced a rise, reaching 49.8 compared to the previous 49.2.

“However, the subindex still remained in contraction territory, reflecting weakness in overall domestic and external demand,” Tommy Wu, senior economist at Commerzbank, said in a report.

Exports should be supported by the tariff truce with the US for the 90-day period till mid-August. However, the two sides have been accusing each other of violating the truce agreement.

Despite the tariff truce, US-China tensions are rising in other sectors.

The Trump administration implemented several measures targeting China.

These included revoking some Chinese student visas, limiting chip design software sales, and attempting to hinder global sales of AI chips from a major Chinese technology company.

Recent comments from US Treasury Secretary Scott Bessent indicate that trade discussions between the two nations are currently in a state of slight standstill. 

He noted the possibility of tariffs increasing once more in August should negotiations fail to advance.

Services activity lacklustre

China’s non-manufacturing PMI stayed in expansion mode at 50.3 in May, slightly lower than April’s 50.4, according to official figures.

The construction PMI saw a slight decrease, moving from a previous value of 51.9 to 51, but it still held steady within the subindexes.

Government investment in infrastructure contributed to this support.

Driven by increased holiday spending during the Labour Day holiday in early May, the Services PMI saw a slight increase to 50.2, up from the previous reading of 50.1, Wu noted.

“Nevertheless, such readings suggest domestic demand has remained rather soft despite this year’s policy focus to support consumption,” Wu said.

Policy strength may depend on future tariffs

Tariffs and declining exports are expected to significantly slow China’s economic growth in the latter half of this year and into 2026, according to Commerzbank. 

Increased export costs from tariffs will likely reduce international demand and export volumes, negatively impacting the manufacturing sector and potentially employment. 

Lower export earnings will affect China’s trade surplus and may decrease investment in export-oriented industries. 

This combined effect is projected to moderate overall economic growth, potentially impacting domestic consumption and requiring government policy intervention.

To bolster the economy, China’s government will persist in executing the policies established during the National People’s Congress annual meetings held in March.

Beijing has indicated its readiness to implement further measures as necessary. 

Wu said:

We think this will depend on the future path of the tariffs.

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Europe’s relationship with the US is shattering. 

Under Donald Trump’s second term, trade friction has returned, and digital dominance by US companies is now under strain. And this time it’s serious.

European institutions and voters are responding not just with frustration, but with action.

A growing wave of regulation, open-source investment, digital taxes, and AI restrictions is turning the “Buy from EU” movement into a coordinated policy direction.

Is consumer sentiment actually changing?

Recent surveys show a measurable change in European buying behavior away from US brands. 

According to the European Central Bank’s March 2025 Consumer Expectations Survey, 44% of euro area respondents said they were willing to reduce their spending on American goods.

Among wealthier households, the number was even higher.

But what’s more telling is that the main reason wasn’t price, but preference.

The median “substitution score” among those who chose to switch due to preference was 95 out of 100. That number held steady even when hypothetical tariffs were set at just 5%.

In Germany, the trend is even clearer. A May 2025 survey showed that over half of respondents were either already cutting back on US products or planning to do so. 

Nearly a third said they wanted to stop using American-made smartphones.

Around 30% said they were actively avoiding US computer hardware and social media services.

This isn’t consumer behavior driven by convenience or cost. It’s political.

Many in Germany cited disapproval of Trump’s support for far-right groups like the AfD as a reason to change their purchasing choices. 

In today’s climate, “Made in USA” can act as a warning label rather than a selling point.

Why Meta may become the EU’s biggest legal target

Meta is preparing to train its AI models using decades of data from European users, such as posts, photos, comments, and that without asking for permission. 

The company is claiming “legitimate interest” under GDPR, which allows for certain uses of personal data without explicit consent. Privacy watchdogs disagree.

The group noyb, led by Max Schrems, has filed a cease-and-desist and is preparing for court.

This is not the first time Meta has relied on the same legal argument.

In 2023, it was forced to drop “legitimate interest” as a justification for personalized advertising.

Schrems argues that if Meta cannot target users with ads under that basis, it certainly cannot feed their personal histories into AI models.

Noyb estimates Meta could face damages of over €200 billion if a class-action suit proceeds.

That figure is based on €500 per user across Meta’s roughly 400 million monthly users in the EU.

Meta argues that it needs user data to make its models more culturally aware, but other companies like OpenAI and France’s Mistral manage without social media datasets.

Meta may not only lose the legal fight, it may lose the narrative in Europe altogether.

Could open source replace US software dominance in public institutions?

Germany’s federal government spends €1.3 billion annually on software. More than €200 million of that goes directly to Microsoft. 

These contracts lock public institutions into proprietary ecosystems that are expensive and inflexible.

A growing number of European institutions are looking for a way out.

Open-source alternatives offer more than cost savings. They allow public institutions to host their own data, tailor systems to national needs, and avoid relying on US cloud infrastructure.

For countries concerned about the US Cloud Act, which could compel American companies to hand over data even if stored abroad, that distinction is extremely important.

Several European governments are making open-source the default. France’s 2030 digital transition plan prioritizes FLOSS solutions. 

Germany’s openDesk project is providing modular systems for municipalities. Switzerland has passed a law mandating open-source software for public administration.

This is no longer just a technical conversation. It’s a political one. Countries are using procurement policy to build digital sovereignty.

Why Germany wants to tax Google and Meta

On May 29, 2025, Germany’s Minister of State for Culture, Wolfram Weimer, proposed a 10% tax on digital services offered by large online platforms like Google and Meta. 

The aim is to tax revenue generated within Germany by companies that, in his words, “pay hardly any taxes, invest too little, and give far too little back to society.”

The plan isn’t yet government policy, but it reflects a shift in attitude.

Trump has warned that any such tax would trigger retaliatory tariffs.

Similar digital service taxes in France and the UK prompted Section 301 investigations and threats of economic retaliation during Trump’s first term.

Weimer says he is willing to take the risk. He compared Google’s influence on public knowledge to a monopoly over language itself. 

If a company has the power to rename geographic regions or filter political news, he argued, then taxing it is the least a government should do.

What happened with Google Maps and why it matters

During the 2025 Ascension Day holiday in Germany, drivers using Google Maps were misled into thinking that large parts of the autobahn system were closed. 

The app showed hundreds of false roadblocks and stop signs.

The issue also affected users in Belgium and the Netherlands. It led to widespread delays, with drivers flooding alternative roads and calling police hotlines in confusion.

Google later blamed a mix of third-party data, user reports, and slow filtering.

Other navigation apps like Waze and Apple Maps showed no problems. Google said it was working on removing the false reports but declined to offer a specific cause.

Some argue that this wasn’t just a technical glitch. It demonstrated the risks of relying on a single US-controlled platform for critical infrastructure. 

For policymakers arguing in favor of European-controlled digital services, it was proof that the infrastructure of daily life should not be outsourced to foreign companies with opaque data systems.

At the end of the day, what’s clear is that Europe is building firewalls. Not just against foreign surveillance or trade shocks, but against the loss of digital self-determination.

This is part of a bigger trend, a bigger plan with the ultimate goal of reducing Europe’s reliance on the US.

Whether it’s about products, infrastructure, or AI training, perhaps it’s about time that Europe aims not just to regulate the future, but to own it.

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