Starling Bank eliminates 130 positions as part of its AI and restructuring initiative.

      Starling Bank is reducing its workforce by approximately 130 positions, about 3% of its 4,000 employees, as it reorganizes its banking and technology operations. The London-based neobank informed staff this week that these changes aim to simplify operations, eliminate redundancy, and speed up product delivery.

      This move coincides with Starling's increased integration of AI into its operations. In March, the bank introduced Starling Assistant, an AI tool designed to help users establish savings goals, manage bill payments, and assess their spending habits through voice or text prompts.

      Falling profits in a declining interest rate environment

      This restructuring follows another year of declining profits. Pre-tax profit dropped to £217 million for the year ending in March, down from £223 million the previous year, and total revenue decreased from £940 million to £887 million. Starling attributes these declines to decreasing interest rates, which have impacted profit margins across UK banking. Although the neobank remains profitable with five consecutive years of profits, the trend is concerning.

      Customer growth continued, with platform accounts increasing to 6.2 million from 5.3 million the previous year, and deposits reaching £12.7 billion.

      The AI competition among neobanks

      Starling's focus on AI reflects a larger trend among digital banks to automate customer-facing services. In April, Revolut also launched its AI assistant, AIR, which provides similar functionalities for spending analysis and account management.

      Starling's scam detection tool, introduced in October 2025, employs Google’s Gemini models to evaluate marketplace listings and identify fraud in real-time. This tool has been enhanced to detect over ten types of scams, including romance fraud and deepfake phishing.

      "A crucial aspect of our competitive advantage over traditional banks is our agility and our ability to rapidly test, launch, learn, and adapt," stated a Starling spokesperson. They also noted that the bank continues to recruit technology and AI engineers despite job cuts in other areas.

      Engine as the growth element

      Engine, Starling’s software-as-a-service division that licenses the bank's core technology to other financial institutions, represents the brighter side of the business. Last year, Engine's revenue increased by 25%, and its customer base doubled due to rising international demand.

      Engine currently services banks in the UK, Romania, Australia, and New Zealand, and is now focusing on entering the US market. The division has launched an office in New York with a reported investment of $50 million and is in talks with mid-tier American lenders.

      A sector-wide transformation

      In June, Morgan Stanley projected that AI could lead to the elimination of up to 400,000 banking jobs in Europe by 2030, doubling its previous estimate of 200,000. Last year, ABN Amro announced plans to reduce its workforce by about 20% by 2028, primarily through automation.

      While Starling's 130 job cuts are relatively minor, they reflect a broader shift within the neobank industry. These digital challengers, which once positioned themselves against the large workforces of traditional banks, are now embracing similar efficiency strategies within their own operations.