Following years of modernising their IT systems to streamline operations and reduce costs after the financial crisis, banks have increasingly turned to the latest AI tools to enhance productivity further. This may result in banks reducing the workforce by at least 3%.
Bloomberg Intelligence, in its latest report, mentioned that Global banks may end up cutting as many as 200,000 jobs in the coming three to five years as artificial intelligence encroaches on tasks currently carried out by human workers. Moreover, a BI senior analyst mentioned that the people working at the back office, middle office and operations are likely to be affected most by the implementation of AI in banking operations.
He further stated, “Any jobs involving routine, repetitive tasks are at risk, but AI will not eliminate them fully, rather, it will lead to workforce transformation.”
The report’s findings have a far-reaching impact of AI on the bottom line of the banks. It stated that by the end of 2027, the bank’s pre-tax could increase by 12% to 17%, adding as much as $180 billion to their combined profit margins as AI is believed to increase productivity and revenue generation.
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Citi Bank also mentioned in their report of June 2024, that Artificial Intelligence is more likely to displace more jobs across the banking industry than in any other sector. Approximately 54% of jobs across banking have a high potential to be automated.
