AI forecast to cut 200,000 bank jobs, lift profits
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The news: Global banks may cut up to 200,000 jobs, or about 3% of their workforce, over the next 3-5 years as artificial intelligence automates tasks traditionally performed by humans, Bloomberg Intelligence reported.
The numbers: BI predicted a 12%-17% boost to banks’ pretax profits by 2027, amounting to USD180 billion ($290 billion) in productivity gains.
A survey of chief information and technology officers found a projected average 3% workforce reduction, with back office middle office and operational roles most at risk.
Know-your-customer tasks and customer service functions may also be affected, with nearly 25% of respondents foreseeing a 5%-10% total headcount decline.
Eight in ten respondents anticipate at least a 5% rise in productivity and revenue within five years, with many expecting AI to transform rather than fully eliminate jobs.
The context: Banks have modernised IT systems after the global financial crisis of the and more recently are adopting AI to streamline operations.
A Citigroup report in June said banking has the highest potential for job automation among sectors. JPMorgan and others have argued AI will augment rather than entirely replace roles, with potential societal benefits like a shorter workweek.
Buy now pay later Klarna, last month told Bloomberg it has already stopped all hiring to instead invest in AI that is doing the work of hundreds of staff.
The source: Bloomberg
