Starling warns UK risks being ‘second in the queue’ on AI

The UK faces the risk of being "second in the queue" for artificial intelligence (AI) development unless it invests more in domestic AI infrastructure, according to Harriet Rees, Starling Bank's chief information officer and the Treasury's AI champion for financial services. Rees warns that British banks' reliance on a few US technology giants exposes the financial system to geopolitical risks.

Starling Bank has become the first UK lender to train an AI model on a UK sovereign cloud, using more than 15 billion anonymised transactions. The bank plans to deploy the model in early 2027, first to enhance fraud detection and then integrate it into an AI financial assistant.

Rees, who co-authored the government's financial services AI adoption plan in July, argues that dependence on American cloud providers like Amazon, Microsoft, and Google could leave banks vulnerable to political disruption. "If it becomes a political matter, then we have less resilience, and that's why things like sovereign AI become very much to the fore," she said.

Rees called on ministers to increase investment in British AI infrastructure, stating that the government's £500 million Sovereign AI fund is insufficient. "Anyone in this space knows that £500m pounds is really not a lot of money," she said. British tech bosses, including executives at BT and Leonardo, have called for over £20 billion of investment in sovereign AI infrastructure over five years.

While acknowledging that British cloud providers struggle to compete with American giants, Rees insists that the UK should have the ambition to develop great AI infrastructure companies based in the country. She suggests that the government could incentivise businesses to use domestic providers, making British cloud services cheaper and more accessible. Rees warns that workers without AI skills may face growing disadvantages in the job market and urges businesses and government to invest in training.