Solaris bets on AI-native banking to rebuild its fintech fortunes

German fintech Solaris is attempting a major reset, positioning itself as “Europe’s first AI-native bank” after several difficult years marked by job cuts, unit closures and regulatory pressure. Backed by majority shareholder SBI of Japan, the Banking-as-a-Service provider is rebuilding its core processes with artificial intelligence while refocusing geographically on its home market.

The company, once a Berlin fintech darling valued at around $1.6 billion in 2021, is now betting that deep automation and data-driven services will restore growth and profitability—and potentially set a template for how other financial institutions modernise their operations.

From fintech star to restructuring mode

Solaris operates with a German banking licence and offers white-label banking infrastructure to partners, allowing them to provide products such as accounts, cards and savings under their own brands. Investors such as Visa and BBVA previously held stakes, and Solaris raised hundreds of millions of dollars during the fintech boom.

That momentum faded in recent years. Solaris faced client losses, difficulties in signing new partners and regulatory challenges. It discontinued substantial parts of a UK acquisition that had been fined €840,000 by the Bank of Lithuania over anti-money laundering (AML) breaches, and it shut its Lithuanian business entirely.

Financial pressure culminated in a rescue funding round in early 2025, when SBI Holdings agreed to increase its stake to over 80 percent as part of a €140 million capital injection that also included Boerse Stuttgart. The deal came with a significantly reduced valuation, and Visa and BBVA exited as shareholders.

A strategic pivot to “AI-native” banking

The new direction is being led by CEO Steffen Jentsch, formerly a managing director at online broker Flatex, who joined Solaris at the beginning of 2026. He describes the arrival of AI in finance as a transformative force that will reshape the entire industry, likening it to a powerful wave that established players must learn to navigate.

The inspiration for Solaris’s AI push, Jentsch says, was the high level of automation in German manufacturing, where robots carry out complex tasks under the supervision of relatively few workers. Given that banking products are already digital, he argues, similar levels of automation should be achievable in financial services.

Solaris is integrating large language models (LLMs) from major providers with its own proprietary AI tools. The bank is rebuilding its operational workflows so that AI agents handle routine and high-volume processes. Human staff remain responsible for governance, oversight and critical decision-making.

According to Jentsch, the company’s modular, API-first architecture is an advantage: embedding AI into a flexible, component-based system is considered easier than retrofitting it into monolithic legacy banking platforms.

Automating operations and boosting productivity

The AI transformation runs through key operational areas, including transaction monitoring, compliance and customer-related processes. Solaris has implemented AI systems to detect suspicious activity and screen for sanctioned individuals and entities as part of its AML controls.

Early internal results, Jentsch claims, show that AI is already improving the precision of transaction screening and the identification of questionable behaviour. Additional AI layers are being deployed to protect systems from cyberattacks and to reduce the risk of model “hallucinations”, where AI tools generate inaccurate or misleading outputs.

Jentsch expects productivity gains comparable to historic technological shifts, drawing a parallel with the impact of the steam engine on industrial output in the 19th century. The aim is to significantly lower the cost of routine banking operations while improving the quality and speed of service delivered to partners.

Staff cuts, retraining and internal reaction

The strategic shift has also meant a leaner workforce. As part of the AI transition, Solaris reduced headcount by roughly 20 percent from a staff of about 400. The company insists that automation is central to its new operating model rather than a post-hoc justification for downsizing.

To bring remaining staff along, Solaris has provided employees with vouchers worth €1,000 each for AI-related training. According to Jentsch, the workforce was cautious at first, monitoring how the new strategy would unfold, but he says that employees are increasingly supportive as they see the tools in action.

Management rejects accusations of “AI washing” – exaggerating AI usage to justify cuts or attract attention – and maintains that AI is being embedded into core processes in a substantive way rather than as a marketing label.

Exiting foreign subsidiaries to focus on Germany

Alongside the AI overhaul, Solaris is reshaping its geographic footprint. The company plans to shut subsidiaries in Italy, Spain and France and concentrate on Germany, where it operates offices in Berlin and Frankfurt.

Jentsch argues that the European Union’s harmonised regulatory framework reduces the need to maintain full local entities across multiple countries. In his view, cross-border relationships can be effectively managed using a combination of in-person meetings and digital communication, supported by a centralised German banking licence.

Enterprise clients at the core of the business

Solaris has also refocused its commercial strategy. Initially built around serving smaller fintechs, the company now targets large enterprises as primary clients.

Its flagship customer is ADAC, Germany’s largest motoring association with around 23 million members. Solaris secured a significant contract with ADAC in 2022 that is reportedly worth more than €100 million in annual revenue. The company already issues ADAC-branded credit cards and is preparing to add savings accounts for ADAC members.

Boerse Stuttgart Group, operator of the Stuttgart stock exchange, is another core partner and an investor. Together, ADAC and Boerse Stuttgart currently account for around 80 percent of Solaris’s revenue, underscoring both the importance and risk of client concentration.

Jentsch acknowledges that reliance on a small number of large customers carries risk, but he frames it as an opportunity as well, pointing to the strong “lock-in effect” once such partners integrate deeply with Solaris’s infrastructure.

Regulatory constraints and path to profitability

Despite the strategic reset, Solaris remains under restrictions from German regulator BaFin, which must approve new client onboardings. The company is aiming to demonstrate that its enhanced controls, AI-driven monitoring and narrowed strategic focus can satisfy supervisory expectations.

On the funding side, Solaris does not expect to raise additional capital in the near term. Jentsch says SBI’s support has given the company sufficient liquidity to navigate its transformation.

The profitability roadmap has, however, been pushed out. Previous management forecast a return to profit by 2027; the new plan targets 2028. Jentsch is positioning this as a deliberate shift from earlier over-optimism, emphasising that he prefers to set conservative expectations and then outperform them.

The route to profitability, he argues, will come from launching new AI-enhanced services for existing partners, winning a select number of additional enterprise clients, and realising the cost advantages of AI-native operations.

What Solaris’s pivot means for the wider industry

Solaris’s attempt to reinvent itself as an AI-native bank is being closely watched by other German and European financial institutions. If the company can show that deep automation, modular technology and focused client strategy lead to regulatory stability and sustainable profits, it may offer a playbook for other mid-sized banks and Banking-as-a-Service providers.

For now, Solaris remains in transition: shedding overseas units, shrinking its workforce, recalibrating expectations and trying to turn its AI ambitions into tangible results. The coming years will test whether its bet on AI-native banking can restore the reputation and growth trajectory it once enjoyed in Europe’s fintech landscape.