AI Poised to Transform Global Banking: 200,000 Jobs at Risk, Profits Set to Soar

AI adoption could slash 200,000 jobs in global banking - VnExpress International

Banks are expected to cut 200,000 jobs in the next three to five years as AI becomes integral to the workforce. A Bloomberg Intelligence survey that polled over 100 technology executives on Wall Street and at international banks found that the average workforce could reduce by 3% at banks annually, adding up to 200,000 jobs, as AI adoption accelerates. Roles in the back and middle offices and operations are most vulnerable, according to Tomasz Noetzel, BI senior analyst and author of the report. "Any job involving routine, repetitive tasks is at risk," Noetzel said. "But AI will not eliminate them fully, rather it will lead to workforce transformation." AI integration is expected to boost profitability, with pre-tax profits projected to rise by 12-17% by 2027, equating to an additional $180 billion in revenue. According to Fortune, banks have invested heavily in modernizing IT systems to improve efficiency and reduce costs, and many are now embracing AI tools. Citi reported in June that the banking industry is more susceptible to AI-driven job displacement than any other, with 54% of banking jobs having high automation potential. But despite concerns about job losses, many banks emphasize that AI will reshape roles rather than eliminate them entirely. Teresa Heitsenrether, who leads JPMorgan's AI initiatives, said in November 2024 that generative AI had augmented rather than replace jobs. JPMorgan CEO Jamie Dimon expressed optimism about AI's potential benefits in a 2023 Bloomberg Television interview. "Your children are going to live to 100 and not have cancer because of technology. And literally they'll probably be working three-and-a-half days a week." Experts agree that while AI has made remarkable advances, it cannot replace human expertise in areas requiring strategic thinking and research. "AI supports the design of technology, but it is fundamentally different from understanding and addressing the social context where the technology is applied," said Yoshua Bengio, professor at the University of Montreal and a leading AI expert, at a recent event in Vietnam. Truong Gia Binh, chairman of FPT Corporation, echoed this sentiment, advocating for AI as an "ally" rather than a competitor. He urged workers to adapt by acquiring skills in AI, machine learning, data science, problem solving, and analysis to remain competitive in an evolving job market.

Report warns thousands of Wall Street jobs could soon be replaced by AI

Banking profits could skyrocket from boosted productivity A new Bloomberg report has revealed that as many as 200,000 Wall Street jobs could be lost over the next three to five years as artificial intelligence becomes more integrated into workflows. The data comes from a Bloomberg Intelligence survey, which found that Chief Information and Technology Officers are expecting to cut 3% of jobs over the next few years. Nearly one in four predicted job cuts of between 5-10% of their headcounts. Senior analyst and report writer Tomasz Noetzel said that back office, middle office and operations roles are most at risk of displacement - essentially, the roles that involve routine and repetitive tasks that can be automated for improved efficiency. Although AI and automation is threatening to take work away from humans, Noetzel said that "AI will not eliminate them fully, rather it will lead to workforce transformation." Boosted efficiency could see significant cost reductions for banks - the report suggests pre-tax profits could be 12-17% higher in 2027 than they are today. Around four in five see AI increasing productivity and revenue generation by at least 5% in the next three to five years. However, Bloomberg Intelligence's report seems conservative when compared with other reports. Last summer, Citi said that more than half (54%) of banking jobs are at high risk of being automated. While the outlook may seem negative, a separate report from the World Economic Forum reveals that all hope is not lost. By the end of the decade across all sectors, WEF says we could see a net increase of 78 million jobs, even though 92 million workers could be displaced. That same WEF report echoed Bloomberg Intelligence's findings, revealing that bank tellers are among the most at-risk workers.

AI Could Replace 200,000 Jobs on Wall Street, According to a New Report. These Are the Jobs Most at Risk.

Bloomberg Intelligence surveyed chief information and technology officers at 93 major banks, including Citigroup, JPMorgan, and Goldman Sachs, in a report released Thursday. The report showed that AI could lead to as many as 200,000 job cuts in the banking industry in the next three to five years. Executives expect to cut an average of about 3% of their overall workforce as AI automates more tasks. Nearly one in four executives said that more jobs than the average could be cut, about 5% to 10% of their total workforce. Related: Is AI Taking Your Job This Year? Staggering Stats Show How the Technology Is Reshaping the Workforce. "Any jobs involving routine, repetitive tasks are at risk," stated Tomasz Noetzel, the Bloomberg Intelligence senior analyst who wrote the report. Noetzel said that back office, middle office, and operations roles were the ones with the highest chances of being cut. Bots could manage customer service inquiries, for example. However, Noetzel also says that AI will only transform these jobs, not eliminate them entirely. AI is already being used in the banking industry to automate work that was formerly completed by humans. In March, JPMorgan said that its AI cash flow intelligence tool helped some clients cut human work by almost 90%. The tool analyzes, sorts, and categorizes company cash flows. Related: JPMorgan CEO Jamie Dimon Says AI 'Is Real' and Will Eliminate the 5-Day Work Week. Here's How His Company's Going All In. JPMorgan CEO Jamie Dimon has said that AI has the power to deliver a three-and-a-half-day workweek and increase human lifespans. In February, "buy now, pay later" financing company Klarna said that its AI chatbot did the work of 700 full-time human agents. Klarna CEO Sebastian Siemiatkowski stated earlier this week that AI is currently capable of replacing all jobs, even his own, though it would need more research and development before it could fully accomplish this. Related: 'Not Necessarily Super Excited About This': Klarna's CEO Says AI Can Take Over All Jobs, Including His Own A Citigroup report released in June showed that out of any other industry, including media, software, automotive, and retail, AI posed the highest potential to automate jobs in the finance sector. More than half of the jobs in the banking industry could be automated, per the report. Citigroup also found that AI could add $170 billion to the banking sector by 2028.

Wall Street may slash 200,000 jobs as AI erodes roles

Global banks may cut up to 200,000 jobs in the next three to five years due to AI. Positions in the back office, middle office, and operations are most at risk. Customer services and know-your-customer roles may also change. AI tools are expected to increase productivity and revenue for banks.Global banks are expected to cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers, according to Bloomberg Intelligence. Chief information and technology officers surveyed for BI indicated that on average they expect a net 3% of their workforce to be cut, according to a report published Thursday. Also Read: Microsoft announces job cuts, plans to axe 1% of underperforming workforce Back office, middle office and operations are likely to be most at risk, Tomasz Noetzel, the BI senior analyst who wrote the report, said in a message. Customer services could see changes as bots manage client functions, while know-your-customer duties would also be vulnerable. "Any jobs involving routine, repetitive tasks are at risk," he said. "But AI will not eliminate them fully, rather it will lead to workforce transformation." Also Read: No threat to jobs; there will be a 'jugalbandi' of AI and human Nearly a quarter 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 in the industry, feeding through to improved earnings. In 2027, banks could see pretax profits 12% to 17% higher than they would otherwise have been -- adding as much as $180 billion to their combined bottom line -- as AI powers an increase in productivity, according to BI. Eight in 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 shave costs in the wake of the financial crisis, have been flocking into 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 across the banking industry than in any other sector. About 54% of jobs across banking have a high potential to be automated, Citi said at the time. Still, many firms have stressed that the shift will result in roles being changed by technology, rather than replaced altogether. Teresa Heitsenrether, who oversees JPMorgan's AI efforts, said in November that the bank's adoption of generative AI was so far augmenting jobs. Jamie Dimon, JPMorgan's chief executive officer, told Bloomberg Television in 2023 that AI is likely to make dramatic improvement in workers' quality of life, even if it eliminates some positions. "Your children are going to live to 100 and not have cancer because of technology," Dimon said at the time. "And literally they'll probably be working three-and-a-half days a week."

AI threatens as many as 200,000 jobs in global banks - Bloomberg

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Chief information and technology officers surveyed for BI indicated that on average they expect a net 3% of their workforce to be cut. Nearly a quarter of the 93 respondents predict a steeper decline of between 5% and 10% of total headcount, with the biggest banks to the fore. Back office, middle office and operations are likely to be most at risk, according to Tomasz Noetzel, the BI senior analyst who wrote the report. Customer service operations could also be hit as chatbots become more adept at managing client functions, while know-your-customer duties would also be vulnerable. "Any jobs involving routine, repetitive tasks are at risk," he says. "But AI will not eliminate them fully, rather it will lead to workforce transformation." The BI figures are dwarfed by forecasts from Citi, which in June projected that over half - 54% - of jobs in banking have a high potential for automation, more than any other industry. Another 12% of jobs have high potential for "augmentation". "Long-established jobs have been eliminated in past periods of technological transformation, to be replaced by new ones," stated the Citi report. "Many firms have vanished too. AI will repeat this cycle, possibly speeding it up."

Wall Street to cut 200,000 jobs as AI reshapes banking | bobsguide

Wall Street is on the cusp of a workforce transformation, with global banks expected to eliminate up to 200,000 jobs in the coming years as artificial intelligence reshapes the financial sector. Wall Street is bracing for a wave of job cuts as artificial intelligence transforms the financial services sector, with global banks expected to shed as many as 200,000 roles over the next three to five years. According to Bloomberg Intelligence (BI), the reductions equate to a 3% drop in headcount on average, with back-office, middle-office, and operational roles most exposed to automation. Chief information and technology officers surveyed for the report, which included institutions like Citigroup, JPMorgan Chase, and Goldman Sachs, cited the growing adoption of AI tools as a key driver of the cuts. Tasks involving routine, repetitive processes are at greatest risk, with roles in customer service and know-your-customer compliance likely to be heavily impacted. While some predict steeper cuts of up to 10% of total headcount, BI senior analyst Tomasz Noetzel noted that AI would not eliminate these jobs entirely but instead transform them. Banks have been modernising their IT infrastructure for over a decade, aiming to streamline operations and reduce costs in the aftermath of the financial crisis. The adoption of generative AI represents a new phase in this evolution, promising to boost efficiency while reshaping workforce requirements. Citi, in a report published in June, highlighted that 54% of jobs in banking have a high potential to be automated, the highest proportion of any industry. Despite the disruption, AI is expected to deliver significant financial benefits. Bloomberg Intelligence estimates that the technology could lift banks' pre-tax profits by 12% to 17% by 2027, potentially adding $180 billion to their collective bottom line. More than 80% of executives surveyed anticipate that AI will increase productivity and revenue by at least 5% over the next five years. The changes are already being felt across the sector. JPMorgan Chase, one of the largest banks in the United States, has integrated AI into various functions, including risk management and client services. Teresa Heitsenrether, who oversees the bank's AI initiatives, said in November that the technology has so far augmented jobs rather than replaced them outright. However, as the deployment of generative AI accelerates, the balance between augmentation and displacement may shift. Jamie Dimon, JPMorgan's chief executive, has spoken optimistically about the transformative potential of AI, not just for banking but for society more broadly. In an interview with Bloomberg Television in 2023, he argued that technological advances would lead to significant improvements in living standards, even if they result in some job losses. "Your children are going to live to 100 and not have cancer because of technology," Dimon said. "And literally they'll probably be working three-and-a-half days a week." The optimism surrounding AI's potential for innovation is tempered by the challenges it poses for the workforce. While proponents stress that roles will be redefined rather than eliminated, the rapid pace of automation is likely to create uncertainty for workers in affected roles. Tasks once requiring human intervention are increasingly being handled by algorithms and bots, raising questions about retraining and reskilling. Banks have argued that these changes are necessary to remain competitive in an industry under constant pressure to reduce costs and improve efficiency. The move towards automation is seen as a continuation of efforts to modernise and future-proof operations, particularly as technological advancements create new opportunities for growth. Nevertheless, the scale of the anticipated job cuts underscores the transformative impact AI is expected to have on Wall Street. With productivity gains projected to reshape the financial services landscape, the industry faces a delicate balancing act: delivering efficiency and profitability while managing the societal implications of workforce displacement. For now, the promise of AI-driven growth remains intertwined with the uncertainties of a rapidly evolving labour market.

Wall Street Expected to Shed 200,000 Jobs as AI Erodes Roles

Global banks are expected to cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers, according to Bloomberg Intelligence. Chief information and technology officers surveyed for BI indicated that on average they expect a net 3% of their workforce to be cut, according to a report published Thursday.

Don't Bank on Your Banking Job Outlasting AI

Over the past few months, I've had occasion to speak at a number of conferences concerned with the impact of artificial intelligence on financial jobs. My audience's interests vary. Some are students and young professionals concerned about job prospects. Some are bank executives and investors interested in employee cost projections. Some are customers and regulators who want to know how AI will change client experiences and protections. And in some cases, they are interested in learning how to exploit opportunities to sell to established financial institutions or to compete with them. I have one answer for all of them. AI advances of the last five years or so will completely eliminate some large categories of financial jobs that have been around for many decades. However, like financial innovations of the past, it will also create jobs in two different ways. The improved efficiency and power of AI methods will create entirely new opportunities, and the improved performance of financial systems will stimulate growth in the sector.