- 200,000 European banking jobs could be lost by 2030, analysts warn
- Physical bank closures have already led to extensive losses
- JPMorgan Chase CEO disagrees – we need entry-level jobs for long-term success
AI-induced tech layoffs have already been widely reported, but a new Morgan Stanley report (via Financial Times) suggests that banking may be the next industry to be hit by widespread layoffs.
The report claims that as many as 200,000 European banking jobs are expected to be at risk by 2030 as a result of artificial intelligence, which equates to around 10% of Europe’s financial workforce across 35 major banks.
Job cuts are expected to mostly hit back and middle office roles, including risk management and compliance, where AI can deliver around 30% efficiency gains.
Could AI replace bankers?
Banks have already been criticized for closing brick-and-mortar locations in recent years to cut costs, with over 6,000 closures in the UK since 2015, but their models are being challenged once again as AI threatens many of the remaining human workers.
We’ve already seen some of the effects of AI on the banking workforce, with ABN Amro, Société Générale and Goldman Sachs all warning of potential job cuts or hiring freezes.
However, JPMorgan Chase CEO Jamie Dimon warned to the contrary – removing junior roles could undermine future skills and training, and while such a move may prove successful in the short term, it could lead to long-term failures.
This can also lead to disruption of the career ladder, with a lack of entry-level roles making the sector inaccessible to newly qualified workers.
Dimon even suggested that AI could hold the key to unlocking shorter work weeks and better work-life balance for employees.
AI’s effects have largely been delayed on the industry due to its highly regulated nature, but with a growing number of compatible AI tools on the shelves, the same effects we’ve seen on technicians and retail workers could be reflected in the banking sector next.
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