Starling Bank to cut 130 jobs and boost investment in AI to reduce costs | Starling Bank

Starling Bank said it would cut more than 100 jobs as it invests more in artificial intelligence to cut costs.

The digital-only bank told staff it would cut 3% of its workforce, or 130 jobs, as part of a restructuring of its banking and technology operations.

The London-based fintech, which employs more than 4,000 people, said the restructuring was necessary as it cut “repetitive” roles and increased spending on artificial intelligence.

The factors that give it a “competitive advantage over legacy banks” are its “agility” and “the ability to rest, activate, learn and quickly reorganize”, the bank said.

“As we continue to recruit technology and AI engineers, we recently told colleagues that we were changing parts of our banking team structure to simplify how we work, reduce instances of duplication, and accelerate greater product delivery,” he said.

“We have begun a period of consultation with colleagues whose roles may be affected by these changes.”

The cuts come at a critical point for the bank, which reported a 6% drop in revenue to £887 million in the year ending March. Pre-tax profit fell 3 percent to £217 million, partly due to investments in digital banking software Engine.

Founded in 2014 by Anne Boden, a former executive at the Royal Bank of Scotland, Starling was part of a trio of online-only neobanks that emerged, along with Revolut and Monzo, to disrupt traditional banking in the UK in the mid-2010s.

It has 6.2 million customers, mostly in the UK. However, like many of its peers, it had difficulty expanding abroad and abandoned its bid to obtain a European banking license in 2022.

Its growth also took a hit in 2021 after the UK’s financial watchdog imposed restrictions on it due to findings that its financial crime controls were inadequate. The rules prevented Starling from opening new accounts for high-risk customers.

In 2024, the Financial Conduct Authority found the bank operated with “shockingly lax” controls, which it said “left the financial system wide open to criminals and those subject to sanctions.” The regulator fined the firm £29 million.

However, there has been speculation for a long time that the bank might be listed on the stock exchange. In January Raman Bhatia, Starling’s chief executive, told the Sunday Times that he could “see this business as a plc in the near term”, although there were no “firm plans”.