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(Bloomberg) — Global banks will cut up to 200,000 jobs in the next three to five years as artificial intelligence invades tasks currently performed by human workers, according to Bloomberg Intelligence.
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CIOs surveyed for BI indicated that, on average, they expect a net 3% cut in their workforce, according to a report released Thursday.
According to Tomasz Noetzel, the BI senior analyst who wrote the report, the office, middle office and operations are likely to be most at risk. Customer services could see changes as bots handle customer functions, while know-your-customer duties would also be vulnerable. “Any job that involves routine, repetitive tasks is at risk,” he said. “But AI won’t eliminate them completely, it will lead to the transformation of the workforce.”
Almost a quarter of the 93 respondents predict a steeper decline of between 5% and 10% of the total workforce. The peer group covered by BI includes Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc.
The findings point to far-reaching changes in the sector, fueled by improved incomes. By 2027, banks could see pretax profits 12% to 17% higher than they would have been otherwise, adding up to $180 billion to their combined bottom line as AI drives an increase in productivity, according to BI. Eight out of ten respondents expect generative AI to increase productivity and revenue generation by at least 5% in the next three to five years.
Banks, which have spent years modernizing their IT systems to speed up processes and cut costs in the wake of the financial crisis, have embraced the new generation of AI tools that could further improve productivity.
Citi said in a report in June that AI is likely to displace more jobs in the banking industry than in any other sector. About 54% of banking jobs have a high potential for automation, Citi said at the time.
Still, many companies have stressed that the shift will result in technology changing roles, rather than replacing them entirely. Teresa Heitsenrether, who oversees JPMorgan’s AI efforts, said in November that the bank’s adoption of generative AI was increasing jobs so far.
JPMorgan CEO Jamie Dimon told Bloomberg Television in 2023 that AI is likely to dramatically improve the quality of life for workers, even if it eliminates some positions. “Your children will live to be 100 years old and not have cancer because of technology,” Dimon said at the time. “And literally, they’re probably going to be working three and a half days a week.”
