(Bloomberg) — Global banks will cut as many as 200,000 jobs in the subsequent three to 5 years as artificial intelligence encroaches on tasks currently carried out by human staff, in line with Bloomberg Intelligence.
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Chief information and technology officers surveyed for BI indicated that on average they expect a net 3% of their workforce to be cut, in line with a report published Thursday.
Back office, middle office and operations are prone to be most in danger, in line with Tomasz Noetzel, the BI senior analyst who wrote the report. Customer services could see changes as bots manage client functions, while know-your-customer duties would even be vulnerable. “Any jobs involving routine, repetitive tasks are in danger,” he said. “But AI is not going to eliminate them fully, somewhat it’s going to result in workforce transformation.”
Nearly 1 / 4 of the 93 respondents predict a steeper decline of between 5% and 10% of total headcount. The peer group covered by BI includes Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc.
The findings point to far-reaching changes within the industry, feeding through to improved earnings. In 2027, banks could see pretax profits 12% to 17% higher than they’d otherwise have been — adding as much as $180 billion to their combined bottom line — as AI powers a rise in productivity, in line with BI. Eight in ten respondents expect generative AI to extend productivity and revenue generation by not less than 5% in the subsequent three to 5 years.
Banks, which have spent years modernizing their IT systems to hurry up processes and shave costs within the wake of the financial crisis, have been flocking into the brand new generation of AI tools that might further improve productivity.
Citi said in a report in June that AI is prone to displace more jobs across the banking industry than in some other sector. About 54% of jobs across banking have a high potential to be automated, Citi said on the time.
Still, many firms have stressed that the shift will lead to roles being modified by technology, somewhat than replaced altogether. Teresa Heitsenrether, who oversees JPMorgan’s AI efforts, said in November that the bank’s adoption of generative AI was to date augmenting jobs.
Jamie Dimon, JPMorgan’s chief executive officer, told Bloomberg Television in 2023 that AI is prone to make dramatic improvement in staff’ quality of life, even when it eliminates some positions. “Your kids are going to live to 100 and never have cancer due to technology,” Dimon said on the time. “And literally they’ll probably be working three-and-a-half days per week.”