- 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-driven tech layoffs are already widely reported, but a new report from Morgan Stanley (via Financial Times) suggests that the banking sector could be the next sector to be hit by widespread layoffs.
The report claims that up to 200,000 jobs in the European banking sector are expected to be at risk by 2030 due to AI, equivalent to around 10% of the European financial workforce at 35 major banks.
Job cuts are expected to primarily affect back- and middle-office roles, including risk management and compliance, where AI can drive efficiency gains of around 30%.
Could AI replace bankers?
Banks have already been criticized for closing physical sites in recent years to cut costs, with more than 6,000 closures in the UK since 2015, but their models are once again being called into question as artificial intelligence threatens many of the remaining human workers.
We have already seen some of the effects of AI on banking staff, with ABN Amro, Société Générale and Goldman Sachs all warning of possible job cuts or hiring freezes.
However, Jamie Dimon, CEO of JPMorgan Chase, warned otherwise: cutting junior positions could harm future skills and training. Therefore, although such an approach could prove successful in the short term, it could lead to failures in the long term.
It could also lead to disruptions in career progression, with a lack of entry-level positions making the sector inaccessible to newly qualified workers.
Dimon even suggested that AI could hold the key to reducing work weeks and improving work-life balance for employees.
The effects of AI have been largely delayed on the sector due to its heavily regulated nature, but with a growing number of compliant AI tools hitting shelves, the same effects we’ve seen on tech and retail workers could next be reflected in the banking sector.
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