The neobank that owns buy-to-let lender Fleet Mortgages is automating its way through a profit dip
Starling Bank has told staff that it would cut approximately 130 jobs as it restructures its banking and technology operations, citing artificial intelligence as a primary driver. The move, first reported by the Financial Times this morning, follows a 3% dip in pre-tax profit to £217m in the year to March, as falling Bank of England base rates compressed the interest income the neobank relies on for the bulk of its revenues.
Group revenues dropped 6% from a year before to £887m. Starling's interest income fell from £811m to £759m as the Bank of England cut rates several times over the year.
The bank said the restructuring would eliminate "duplicate" roles and was partly driven by several major projects coming to an end. "A key factor in our competitive edge over legacy banks is our agility; our ability to test, launch, learn and reorganise at pace," the bank said. It has been deepening its use of AI across operations, having launched what it described as the UK's first agentic AI financial assistant in March - built on Google Gemini - which allows customers to manage savings, budgets and payments through natural language.
Why brokers should be paying attention
For mortgage professionals, Starling is not simply a neobank that competes for current account customers. In July 2021, Starling acquired specialist buy-to-let mortgage lender Fleet Mortgages for £50 million, which had around £1.75 billion of mortgages under management at the time. Fleet has since grown significantly and remains one of the more active buy-to-let lenders in the specialist market. The direction Starling takes operationally - and how it uses AI to reshape its internal processes - has direct implications for that lending operation and the brokers who place business with it.
Starling has also historically offered mortgage-related services through its marketplace — it partnered with digital broker Habito from 2018, giving customers in-app access to mortgage advice. Habito has since been acquired by Monzo (December 2025), ending that arrangement, but the Fleet Mortgages acquisition remains Starling's primary foothold in the mortgage market.
Starling has 6.2 million customers, mostly in the UK, and employs more than 4,000 people. The 130 roles represent roughly 3% of the total workforce - a significant restructuring by any measure, but not a crisis signal for a bank that has now delivered five consecutive years of profitability, a record among UK challenger banks.
The rate squeeze hitting the whole sector
Starling's revenue pressure is not unique to it. The business model shared by most UK neobanks - parking large customer deposits at the Bank of England and collecting interest - worked exceptionally well when rates were at 5.25%. As the BoE has cut rates, that income has eroded. Many neobanks generate the majority of their revenues by parking customer deposits at the Bank of England rather than lending out those deposits.
Morgan McKinley's labour market report, published in May 2026, forecast that neobanks including Monzo and Starling were expected to scale back recruitment growth in 2026, with Starling having already recorded a 24% decline in job vacancies in the period before today's announcement. Today's cuts confirm that prediction has landed.
The response across the sector has been to automate and to diversify. Starling's Engine division - its software-as-a-service arm that licenses its core banking platform to banks in Canada, Romania, New Zealand and Australia - delivered a 24.5% revenue surge to £70m, providing meaningful cushion against the rate headwind. Chief executive Raman Bhatia has said Engine is on a "comfortable path" to £100m in revenue and described it as a potential future unicorn in its own right.
For the mortgage market, today's announcement is a reminder that the lenders and platforms brokers work with are themselves navigating an AI-driven restructuring that is reshaping how financial services firms are staffed, organised and operated. Fleet Mortgages' operational future is tied to decisions being made at a group level by a business that has just confirmed AI and efficiency are its primary strategic levers.
