Global banks are projected to cut as many as 200,000 jobs in the next three to five years as artificial intelligence takes over tasks traditionally done by human workers, according to a market survey by Bloomberg Intelligence. Chief information and technology officers surveyed expect an average net reduction of 3% in their workforce. Nearly a quarter of the 93 respondents predicted a steeper decline of between 5% and 10% of total headcount, particularly in the largest banks.
Back office, middle office, and operations roles are likely to be most at risk, according to Tomasz Noetzel, a senior analyst who authored the report. Customer service operations could also be affected as chatbots become more capable of handling client functions, and know-your-customer duties could be automated as well. “Any jobs involving routine, repetitive tasks are at risk,” Noetzel said.
Banking workforce transformation due to AI
“But AI will not eliminate them fully; rather, it will lead to workforce transformation.”
The potential for job losses in banking due to AI is significant. A report from June projected that over half—54%—of jobs in banking have a high potential for automation, more than in any other industry.
Another 12% of jobs have high potential for “augmentation.”
“Long-established jobs have been eliminated in past periods of technological transformation, only to be replaced by new ones,” the Citi report stated. “Many firms have vanished too. AI will repeat this cycle, possibly speeding it up.”
While some believe the promises of AI in customer service have been exaggerated, others argue that continued development will yield more sophisticated and helpful AI solutions in the coming years.
A Portfolio Manager at Global FinTech & Financial, Robeco, commented, “With today’s chatbots, it’s hard to imagine a significant improvement in the next five years. Banks, known for their slow pace of innovation, will struggle to shift to AI bots that can assist with more complex customer inquiries.”
As the banking industry evolves, firms anticipate transformations driven by AI, with some jobs expected to disappear while new ones emerge, continuing the cycle seen in previous technological advancements.
Cameron is a highly regarded contributor in the rapidly evolving fields of artificial intelligence (AI) and machine learning. His articles delve into the theoretical underpinnings of AI, the practical applications of machine learning across industries, ethical considerations of autonomous systems, and the societal impacts of these disruptive technologies.
