AML Compliance
Starling Bank is preparing for a secondary share sale that could value the UK fintech at £4 billion, according to the Financial Times. With Morgan Stanley and Rothschild advising, the deal is set to attract new investors and cement Starling’s position among Europe’s most mature challenger banks. While the headline figure is eye-catching, what really underpins Starling’s valuation story is something less glamorous but far more critical: compliance resilience.
Recent industry evidence shows that regulatory and compliance failures can wipe billions from financial services valuations through fines, licence restrictions, and delayed market entry, making compliance maturity a core factor in how institutional investors now price fintech risk. For example, the UK’s Financial Conduct Authority issued 37 final notices in 2024/25 and imposed over £186 million in fines related to compliance and financial crime controls, demonstrating how enforcement action directly impacts firms’ financial outcomes and risk profiles.
How Investor Expectations For Fintech Growth Have Changed
Early-stage fintech valuations often surged on the back of user acquisition and top line growth. But the investor landscape has shifted. Venture capital and institutional investors are now scrutinising compliance maturity, governance frameworks, and risk management as much as they are growth metrics.
A PwC survey shows that corporate governance (40%), and AML and fraud risk (38%) rank among the top compliance priorities for financial services firms
FCA enforcement data for 2024/25 reveals that many enforcement cases arise from weak governance, inadequate controls, and culture issues, reinforcing why investors are now demanding proactive evidence of compliance resilience.
For fintechs like Starling, this shift means compliance is not just a defensive cost, it’s a valuation driver. In practical terms, this means fintech valuations are increasingly shaped by how efficiently firms can scale compliance alongside revenue, rather than how quickly they can acquire users alone.
Why International Expansion Puts Compliance Under The Spotlight
Starling’s ambitions to expand into the U.S. and European markets will test its ability to meet international regulatory standards.
Each jurisdiction brings unique expectations:
United States; Under the BSA, FinCEN requires AML programs to include the “five pillars,” including independent testing, and expects ongoing (transaction) monitoring under the CDD rule; enforcement is active and ongoing.
European Union; Through the EBA’s developing AML/CFT policies, including its Guidelines on Remote Customer Onboarding, and with AMLA now taking shape, the regulatory expectation for harmonised KYC onboarding and watchlist standards across member states is rising.
United Kingdom; Ongoing oversight under the FCA’s Senior Managers and Certification Regime (SMCR), which demands clear accountability at board and executive levels.
Firms with scalable tools for payment screening and alert adjudication will find it easier to enter new markets while maintaining investor trust. Firms that underestimate these requirements often face licence delays, constrained product launches, or heightened supervisory scrutiny, all of which can slow expansion and weaken investor confidence. As a result, investors are increasingly assessing fintechs using criteria that closely mirror regulatory expectations.
What Investors Are Now Looking For In Fintech Compliance
When valuing fintechs, investors are increasingly asking the same set of questions regulators do:
How robust are the firm’s onboarding processes?
Investors want assurance that AML compliance processes aren’t just manual but automated, scalable, and auditable.
Is transaction monitoring real-time and adaptive?
Static, rules-based monitoring is increasingly seen as insufficient. Investors look for RegTech adoption that incorporates AI or machine learning for anomaly detection.
How effective is the firm’s alert management?
High false positives can cripple scalability. Sophisticated alert adjudication demonstrates operational maturity.
Does the culture support compliance?
The FCA has stressed repeatedly that “culture drives conduct and decision-making…”, a phrase which underscores regulators are looking for evidence that compliance isn't simply a tick-box exercise but deeply embedded in leadership and behaviour.
How prepared is the firm for global regulatory shifts?
With the EU’s AMLA now expecting strong crypto-asset protections, and recent U.S. regulatory developments tightening controls on cross-border transfers, investors are increasingly rewarding fintechs that are proactive about compliance, rather than reactive.
Why Compliance Is Increasingly Seen As A Growth Advantage
As fintech matures, compliance is evolving from cost centre to growth enabler.
Strong systems and cultures enable firms to:
Scale globally with smoother licence approvals.
Attract institutional capital by reducing regulatory risk exposure.
Protect long-term valuations by avoiding reputational and operational disruptions.
For fintech leaders, the lesson is simple: compliance investment is no longer optional or reactive. It’s a strategic asset that underpins growth, valuations, and trust in the marketplace. For Starling, the implicit message is clear: compliance maturity is not just a regulatory requirement, it’s a competitive differentiator that directly impacts investor appetite. This shift reflects a broader industry trend where compliance infrastructure is becoming as critical to long term value creation as technology and customer experience.
