(Bloomberg) — Global banks will cut up to 200,000 jobs over the next three to five years as artificial intelligence encroaches on tasks currently performed by human workers, according to Bloomberg Intelligence.
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CIOs and technology officers surveyed by BI said they expect, on average, a net reduction of 3% of their workforce, according to a report released Thursday.
The back office, middle office and operations will likely be most at risk, according to Tomasz Noetzel, the senior BI analyst who authored the report. Customer services could see changes as bots handle customer functions, while know-your-customer tasks would also be vulnerable. “All jobs involving routine and repetitive tasks are at risk,” he said. “But AI will not eliminate them completely, but rather lead to a transformation of the workforce. »
Nearly a quarter of the 93 people surveyed expect a more pronounced drop, 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 results highlight profound changes in the sector, which are translating into improved profits. In 2027, banks could report pre-tax profits 12% to 17% higher than they otherwise would have been – adding up to $180 billion to their combined bottom line – as AI drives an increase in productivity, according to BI. Eight in ten respondents expect generative AI to increase productivity and revenue generation by at least 5% over the next three to five years.
Banks, which spent years modernizing their IT systems to speed up processes and reduce costs in the wake of the financial crisis, have been flocking to the next generation of AI tools that can further improve productivity.
Citi said in a report released in June that AI is likely to eliminate more jobs in banking than in any other sector. About 54% of banking sector jobs have high potential for automation, Citi said at the time.
Yet many companies have emphasized that this change will result in roles being altered by technology, rather than replacing them altogether. Teresa Heitsenrether, who oversees JPMorgan’s AI efforts, said in November that the bank’s adoption of generative AI has increased jobs so far.
Jamie Dimon, CEO of JPMorgan, told Bloomberg Television in 2023 that AI is likely to significantly improve the quality of life of workers, even if it eliminates some jobs. “Your kids are going to live to be 100 and not get cancer because of technology,” Dimon said at the time. “And literally, they’ll probably work three and a half days a week. »