Experts warn AI advances could lead to 200,000 banking jobs being cut this year
European banking workers could be at risk of redundancy due to AI after years of job cuts from store closures.
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- 200,000 European banking jobs could be lost by 2030, analysts warn
- Physical bank closures have already led to widespread losses
- JPMorgan Chase CEO disagrees – we need entry-level jobs for long-term success
AI-induced tech layoffs are already widely reported, but a new Morgan Stanley report (via the Financial Times) suggests banking could be the next industry to be hit with widespread redundancies.
The report claims as many as 200,000 European banking jobs are forecast to be at risk by 2030 as a result of AI, equating to around 10% of Europe's finance workforce across 35 major banks.
Job cuts are mostly expected to hit back- and middle-office roles, including risk management and compliance, where AI can deliver around 30% efficiency gains.
Could AI replace bankers?
Banks have already been criticized for closing physical locations in recent years to cut costs, with over 6,000 closures in the UK since 2015, but their models are being challenged once more as artificial intelligence threatens many of the remaining human workers.
Already, we've seen some of the effects of AI on the banking workforce, with ABN Amro, Société Générale and Goldman Sachs all warning of potential job cuts or hiring freezes.
However, JPMorgan Chase CEO Jamie Dimon warned of the opposite – removing junior roles could undermine future skills and training, therefore while such a move could prove successful in the short term, it could lead to long-term failures.
This could also lead to career ladder disruptions, where a lack of entry-level roles make the sector inaccessible to newly-qualified workers.
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Dimon even suggested that AI could hold the key to unlocking shorter working weeks and better work-life balance for employees.
AI's effects have been largely delayed on the industry given its heavily regulated nature, but with a growing number of compliant AI tools hitting the shelves, the same effects we've seen on tech and retail workers could be mirrored in banking next.
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