Banks worldwide are expected to reduce staffing as artificial intelligence increasingly takes on duties that humans once handled.
Key Facts:
– Up to 200,000 jobs could be cut in three to five years, according to Bloomberg Intelligence (BI).
– The average survey participant anticipates a net 3% decrease in personnel.
– Back office, middle office, and operations roles are particularly vulnerable.
– BI projects that by 2027, AI could boost banks’ combined pretax profits by up to $180 billion.
– Major institutions such as Citigroup, JPMorgan Chase, and Goldman Sachs are included in the BI peer group.
The Rest of The Story:
A recent study by Bloomberg Intelligence (BI) reveals that a significant portion of the financial sector’s workforce may face job changes or reductions over the next few years.
The surveyed chief information and technology officers pointed to AI’s rapidly growing capacity to handle routine and repetitive tasks, especially in back office and operations departments.
These changes could help global banks enhance their productivity and bottom line.
According to BI, AI might result in a substantial profit increase for many major institutions, potentially adding between 12% and 17% to their pretax earnings by 2027.
Customer service roles might also evolve, as chatbots and other AI-driven tools manage tasks previously carried out by human representatives.
The study found that 8 in 10 respondents expect AI to raise productivity and revenue by at least 5%.
While experts like Tomasz Noetzel from BI see tasks being replaced, bank leaders maintain that AI will primarily transform roles rather than fully eliminate them.
JPMorgan’s leadership, for instance, has publicly acknowledged that generative AI can augment job functions, offering employees new tools for efficiency.
Still, job reduction concerns persist.
Citi’s June report estimated that more positions in banking face automation risk than in any other industry.
Despite these projections, some executives, such as Jamie Dimon of JPMorgan, emphasize the potential benefits AI brings to quality of life and innovation, believing that the technology could improve workplace conditions and even healthcare outcomes.
Your next best employee won't need:
No sleep. No salary. No benefits. No time off.
Because it won't be human.
By 2030, AI agents will replace 70% of office work (McKinsey) and add $7T to the global economy (Goldman).
Here's how AI agents will change business forever: pic.twitter.com/5o8S907OfX
— Ole Lehmann (@itsolelehmann) December 12, 2024
Commentary:
We believe that as AI becomes more sophisticated, an increasing number of jobs will be absorbed by automation.
This could free people to focus on more creative and fulfilling work, rather than time-consuming tasks that machines can handle better.
Over the next few years, we anticipate this trend will only accelerate, reshaping the workforce in unprecedented ways.
The Bottom Line:
Banks are preparing for considerable workforce changes as they introduce advanced AI tools.
While thousands of jobs may disappear, many will likely be redefined rather than eliminated.
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