Analysts are issuing stark warnings that advancements in artificial intelligence (AI) may lead to the loss of up to 200,000 banking jobs across Europe by 2030. A report from Morgan Stanley, cited by the Financial Times, highlights this potential impact on the finance sector, which could see a reduction of approximately 10% of its workforce among 35 major banks.
The expected job losses primarily target back- and middle-office positions, particularly in risk management and compliance, where AI could enhance efficiency by as much as 30%. This trend follows a broader pattern of job cuts in various industries, where companies have begun to automate roles traditionally held by humans.
As banks continue to face pressures for cost-cutting, the closure of physical branches has already resulted in significant employment losses. In the United Kingdom alone, more than 6,000 bank closures have occurred since 2015. These closures have prompted concerns about the future of the banking model as AI technologies threaten the remaining human workforce.
Major banks, including ABN Amro, Société Générale, and Goldman Sachs, have already indicated potential job cuts or hiring freezes in response to these technological advancements. In contrast, Jamie Dimon, CEO of JPMorgan Chase, argues that eliminating junior roles could jeopardize the development of future skills and training within the sector. He cautioned that while short-term savings may seem beneficial, the long-term consequences could hinder the growth of new talent in banking.
Dimon also suggested that embracing AI could promote shorter working weeks and improve work-life balance for employees, presenting a silver lining in the otherwise challenging landscape. The banking sector, heavily regulated by nature, has experienced a delayed impact from AI adoption. However, with a growing number of compliant AI tools entering the market, the industry could soon face the same disruptions seen in technology and retail sectors.
The evolving landscape of the banking industry raises critical questions about accessibility for newly qualified workers. If entry-level positions continue to diminish, the pathway into the sector may become increasingly obstructed, leading to potential career ladder disruptions.
As the implications of AI advancements unfold, stakeholders in the banking industry will need to navigate these changes carefully to balance efficiency gains with the preservation of a skilled workforce. The coming years will be pivotal in determining how banks adapt to this technological evolution while maintaining their commitment to training and development.
