Global banks are poised to cut up to 200,000 jobs over the next three to five years as artificial intelligence (AI) increasingly automates tasks currently performed by humans, according to Bloomberg Intelligence (BI).
A recent BI report, based on surveys of chief information and technology officers, revealed that on average, banks expect to reduce their workforce by a net 3%. Back-office, middle-office, and operational roles are most vulnerable, as AI takes over routine, repetitive tasks.
Customer service functions, know-your-customer processes, and other administrative duties are also at risk of automation. However, Tomasz Noetzel, the BI senior analyst behind the report, noted that AI will not completely replace jobs but rather transform them.
Nearly 25% of the 93 respondents anticipate steeper cuts of 5% to 10% of their total headcount. The survey covered major players, including Citigroup Inc., JPMorgan Chase & Co., and Goldman Sachs Group Inc.
The adoption of AI is expected to drive substantial changes across the industry, leading to improved profitability. By 2027, AI-powered productivity gains could increase banks’ pretax profits by 12% to 17%, potentially adding $180 billion to their bottom lines, BI estimates. Around 80% of respondents expect generative AI to boost productivity and revenue by at least 5% within the next five years.
Banks have been modernizing their IT infrastructure for years to streamline processes and cut costs. The new wave of AI tools promises even greater productivity improvements. In a June report, Citigroup noted that the banking industry is likely to face more job displacement from AI than any other sector, with 54% of roles having high automation potential.
Despite these projections, many firms emphasize that AI will transform roles rather than eliminate them entirely. Teresa Heitsenrether, who oversees JPMorgan’s AI initiatives, stated in November that generative AI has so far augmented jobs rather than replaced them.
JPMorgan CEO Jamie Dimon echoed this sentiment, highlighting AI’s potential to enhance workers’ quality of life. Speaking to Bloomberg Television in 2023, Dimon remarked that while some positions may be eliminated, technology will bring dramatic improvements. “Your children will live to 100 and not have cancer because of technology,” he said. “And they’ll probably be working three-and-a-half days a week.”