Thousands of AI jobs could be lost in Europe's banking sector by 2030.
Artificial intelligence (AI) and branch closures will drive this trend over the next five years, leading to 10% job cuts across the industry, the Financial Times (FT) reported on Wednesday (December 31), citing predictions from Morgan Stanley.
The report adds that the cuts come as banks scramble to realize savings from AI while moving more operations into the digital realm. The FT added that most of the job cuts are likely to be from back- and middle-office roles, as well as risk management and compliance roles. Morgan Stanley based its analysis on a survey of 35 banks that employ approximately 2.1 million people.
“Many banks say efficiency gains from AI and further digitization can reach 30%,” Morgan Stanley said.
The report notes that banks have already begun to cite AI as a factor in restructuring staffing levels. For example, Dutch lender ABN Amro announced in November that it would cut around 20% of its full-time staff by 2028, while Société Générale CEO Sławomir Krupa warned in March that “nothing is sacred” in the campaign to cut banking costs in France.
“While we are already seeing industry changes in audit, legal and consulting, banks have yet to realize efficiency gains,” said Jason Napier, head of European banking research at UBS. “The cost base is large and these new powerful tools have not yet been fully implemented.”
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“Those who still need confidence that AI will revolutionize financial services should spend more time considering the tools already available,” he added.
A PYMNTS Intelligence survey found that 54% of workers who were employed, looking for work, or studying at the time of the survey believed that generative artificial intelligence poses a “significant risk of widespread job displacement.”
This concern was more pronounced among those who were familiar with generative AI platforms (57%) versus 41% who were not.
“Despite widespread concerns about displacement in general, 38% of workers are concerned that generative AI will ultimately lead to the elimination of certain jobs,” PYMNTS wrote in May. “This personal work fear was higher among users who used generative AI at least weekly (50%) compared to inexperienced users (24%).”
Additional PYMNTS Intelligence examines how AI in banking is ushering in the 'next era.' There, conversational interfaces are moving from simple Q&A bots to tools that can provide strategic insights and contextual advice.
Importantly, PYMNTS reports that nearly three-quarters of bank customers want greater personalization, and built-in conversational AI has the potential to win back 72% of bank customers by delivering that customized experience.
“Cognitive banking is therefore not just about automation, but about personal relevance, timing, and trust,” PYMNTS wrote earlier this year.
