AI could take away 200,000 banking jobs in Europe
What's the story
The European banking sector is on the brink of a major transformation, with more than 200,000 jobs likely to vanish by 2030. A recent analysis by Morgan Stanley and reported by Financial Times, predicts that lenders will increasingly rely on artificial intelligence (AI) and close physical branches. This trend could affect nearly 10% of the workforce at 35 major banks across Europe.
Job sectors
AI's impact on banking operations
The job cuts are expected to hit back-office operations, risk management, and compliance the hardest. These areas of banking are seen as ripe for automation by algorithms that can process data faster and more accurately than humans. Banks are looking forward to efficiency gains of up to 30% from this shift toward AI technology, the Morgan Stanley report said.
Global trend
AI job cuts extend beyond Europe
The trend of job cuts due to AI is not limited to Europe alone. In October, Goldman Sachs had warned its US employees about potential job cuts and a hiring freeze until the end of 2025. The move was part of an AI initiative called "OneGS 3.0," which targets everything from client onboarding to regulatory reporting.
Early actions
Banks already implementing job cuts
Some banks have already started implementing these job cuts. Dutch lender ABN Amro plans to reduce its workforce by 20% by 2028. Meanwhile, Societe Generale's CEO has said "nothing is sacred" when it comes to the impact of AI on banking jobs. However, not all European banking leaders are on board with this trend, with some warning about potential long-term consequences for the industry if junior bankers don't learn fundamentals.