- Analysts warn that 200,000 jobs could be lost in European banking by 2030
- Physical bank closures have already caused widespread losses
- JPMorgan Chase CEO Disagrees: We Need Entry-Level Jobs to Succeed Long-Term
AI-induced tech layoffs are already widely reported, but a new report from Morgan Stanley (via Financial times) suggests banking could be the next industry hit by widespread layoffs.
The report states that up to 200,000 European banking jobs are expected to be at risk by 2030 as a result of AI, equivalent to around 10% of Europe’s financial workforce at the top 35 banks.
The job cuts are expected to primarily affect management and middle roles, including risk management and compliance, where AI can deliver efficiency gains of around 30%.
Could AI replace bankers?
Banks have already been criticized for closing physical locations in recent years to cut costs, with more than 6,000 closures in the UK since 2015, but their models are being questioned once again as artificial intelligence threatens many of the remaining human workers.
We have already seen some of the effects of AI on the banking workforce, with ABN Amro, Société Générale and Goldman Sachs warning of possible job cuts or hiring freezes.
However, JPMorgan Chase CEO Jamie Dimon warned otherwise: Eliminating junior positions could undermine future skills and training, so while such a move could be successful in the short term, it could lead to failures in the long term.
This could also lead to disruption up the career ladder, where a lack of entry-level positions makes the sector inaccessible to newly qualified workers.
Dimon even suggested that AI could be the key to unlocking shorter work weeks and a better work-life balance for employees.
The effects of AI have largely been delayed in the industry due to its heavily regulated nature, but with a growing number of compliant AI tools hitting shelves, the same effects we’ve seen in tech and retail workers could be reflected in banking.
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