Solaris Cuts 20% of Workforce to Become Europe’s First AI-Native Bank — What It Means for BaaS

German embedded finance platform Solaris is eliminating approximately 80 positions — roughly 20% of its 400-person workforce — as part of what the company describes as a comprehensive strategic repositioning. The goal, according to new CEO Steffen Jentsch, is to transform Solaris from a Banking-as-a-Service provider into what the company is calling “Europe’s first AI-native bank.”

The restructuring follows a turbulent period for the Berlin-based fintech. Over the past three years, Solaris has navigated regulatory scrutiny from BaFin, multiple rounds of leadership changes, the failed Contis acquisition, and a rescue funding round in late 2024 that saw Japanese financial conglomerate SBI Group take a majority stake. The latest move under Jentsch — who took over as CEO just three months ago — represents the most definitive strategic shift in the company’s ten-year history.

Beneath the headline, the repositioning has three concrete components. First, Solaris is developing an operating model in which AI agents handle routine operational processes — transaction monitoring, compliance workflows, customer onboarding — while human staff retain responsibility for control, governance, and regulatory oversight. Second, the company plans to restructure its platform around standardised, reusable modules rather than bespoke implementations for individual partners. Third, Solaris intends to expand beyond its traditional neobank and fintech client base toward larger enterprise and institutional partners.

The timing is deliberate. Jentsch has framed the pivot around two pieces of European regulation: the EU AI Act, which establishes the legal framework for deploying AI in high-risk sectors including financial services, and DORA (Digital Operational Resilience Act), which sets operational resilience standards for ICT systems in finance. The argument is that Europe is creating a regulatory environment that makes AI-native banking not only possible but competitively advantageous — and that Solaris, with its German banking licence and API-first architecture, is uniquely positioned to build within that framework.

To understand the significance of this announcement, you need to understand how many times Solaris has already reinvented itself. The company was founded in 2015 as Solarisbank, incubated by the Berlin-based fintech company builder Finleap. It obtained its German banking licence in 2016 — remarkably fast by European standards — and built its early business by enabling neobanks and consumer fintechs like Vivid Money, Tomorrow, and Bitpanda to offer banking products through its API-driven platform without needing their own licences.

The company grew rapidly through the fintech funding boom, raising a total of approximately $736 million across multiple rounds and reaching a valuation of around €1.5 billion. It expanded into digital asset custody, identity verification, and crypto services. It won the Samsung Pay partnership in Germany. It acquired UK-based EMI Contis to expand into the UK market. Along the way, it dropped “bank” from its name in 2022, rebranding to simply Solaris — a signal that it saw itself as a technology company first.

But the growth-first narrative came at a steep cost. The Contis acquisition brought compliance failures, mass customer offboarding, and a lawsuit against Binance over unpaid fees. BaFin intervened with requirements to improve risk management and business organisation. In 2022, Solaris reported revenue of €130 million but losses of €56 million. In June 2025, BaFin fined the company €500,000 for repeatedly exceeding large exposure limits between 2022 and 2024. By the time SBI Group stepped in with €140 million in Series G funding in early 2025 — taking a 70% majority stake — Solaris was a company that had proven the BaaS model could work at scale but had failed to make it work profitably or compliantly.

The phrase “AI-native bank” is doing a lot of heavy lifting in this announcement. Solaris is describing a model where AI agents handle operational processes — KYC verification, transaction monitoring, suspicious activity flagging, customer service interactions, regulatory reporting — while humans maintain oversight and governance. This is a meaningful architectural shift: instead of using AI to augment existing workflows, the company is proposing to build workflows around AI from the ground up, with human review as the exception rather than the rule.

The potential upside is clear. BaaS platforms carry enormous operational overhead. Each partner integration requires onboarding, compliance configuration, transaction monitoring calibration, and ongoing regulatory management. If AI can handle the repetitive, rules-based components of these workflows reliably, the unit economics of serving each partner improve dramatically. A platform that processes the same volume of transactions with half the operational staff would be fundamentally more competitive — and potentially more accurate, given that AI-driven compliance monitoring can operate continuously without the fatigue and inconsistency of manual processes.

But there is an obvious tension. Solaris’s most persistent problems over the past three years have been compliance failures — exactly the domain where the company now proposes to deploy AI most aggressively. BaFin fined the company for exceeding exposure limits. Its Contis subsidiary was fined for AML and information security failures. Regulators ordered improvements to business organisation and risk management. Deploying AI agents to handle compliance processes at a company with this regulatory track record will require extraordinary trust from supervisors — trust that Solaris has not yet earned.

The European fintech sector already has a cautionary example of aggressive AI-driven workforce replacement. Swedish buy-now-pay-later giant Klarna replaced approximately 700 customer service roles with AI between 2022 and 2025, cutting its total headcount from around 7,400 to 3,000. The result was widespread customer complaints about declining service quality. Klarna’s CEO later acknowledged that the emphasis on cost savings had compromised the experience, and the company began rehiring human agents for complex cases — effectively abandoning the “full automation” model in favour of a hybrid approach.

The Klarna comparison is imperfect — Klarna’s AI deployment was primarily customer-facing, while Solaris is proposing AI-driven automation of back-office and compliance functions. But the underlying lesson is the same: the gap between what AI can handle in a controlled demonstration and what it can handle at production scale, with real edge cases, regulatory consequences, and reputational stakes, is often wider than executives expect. For a regulated banking infrastructure provider, the margin for error is even smaller than it is for a consumer lending platform.

The involvement of SBI Group is the most underreported element of this story. SBI Holdings, led by chairman and CEO Yoshitaka Kitao, is one of Japan’s largest financial conglomerates with deep interests in digital finance, blockchain infrastructure, and cross-border payments. SBI’s acquisition of a 70% majority stake in Solaris was not a passive financial investment — it was a strategic acquisition designed to give SBI a licensed banking infrastructure platform in Europe.

Kitao’s public statement is instructive: he described the AI-native bank transformation as the mechanism through which SBI can “realise our vision of a digital financial infrastructure in Europe.” This positions Solaris not as an independent European fintech but as the European arm of SBI’s global digital finance ambitions. For Solaris’s existing BaaS partners — companies that chose Solaris specifically because it was an independent European platform with a German banking licence — this ownership shift raises questions about strategic alignment, data governance, and long-term platform direction that the AI narrative does not address.

Solaris’s repositioning has implications that extend well beyond the company itself. The European BaaS sector has consolidated significantly over the past two years. Railsr merged with Equals Money. Multiple smaller providers have exited or been absorbed. The market is increasingly divided between a handful of scaled platforms — Solaris, ClearBank, Banking Circle, ConnectPay — and a long tail of smaller, regionally focused providers.

If Solaris succeeds in dramatically reducing the operational cost of partner management through AI automation, it will set a new benchmark for what BaaS economics need to look like. Competitors that remain dependent on large compliance and operations teams will face a structural cost disadvantage. This could accelerate consolidation in a market that already has too many providers chasing too few profitable partnerships.

Conversely, if the AI-native approach encounters the same operational and regulatory difficulties that have plagued Solaris’s previous strategy shifts, it will reinforce the market’s growing scepticism about whether BaaS can be a sustainable business model at all. The sector has already lost significant investor confidence. Another high-profile stumble from its most prominent European player would make fundraising even more difficult for the companies still trying to scale.

Solaris’s transformation is equal parts ambitious and desperate. The company has exhausted most of its other strategic options. Growth-at-all-costs failed. The Contis acquisition failed. Diversification into crypto and identity failed. What remains is a German banking licence, an API platform, a Japanese majority shareholder with deep pockets and European ambitions, and a thesis that AI can fix the unit economics that a decade of venture-funded experimentation could not.

The thesis might be right. AI-driven compliance automation, intelligent transaction monitoring, and automated partner onboarding could genuinely transform the economics of banking infrastructure. But the execution risk is enormous — particularly for a company whose regulatory track record gives supervisors every reason to scrutinise rather than trust. The next twelve months will determine whether “AI-native banking” is a genuine paradigm shift or a rebranding exercise applied to the same structural challenges that have defined the BaaS sector’s difficult adolescence.