Artificial intelligence (AI) is forecasted to disrupt the global banking industry, potentially leading to the elimination of as many as 200,000 jobs over the next three to five years, according to a Bloomberg Intelligence (BI) survey. The study, which involved chief information and technology officers from various institutions, revealed an expected net workforce reduction of 3% on average, with nearly a quarter of respondents predicting cuts between 5% and 10%—particularly in the largest banks.
Tomasz Noetzel, a senior BI analyst, highlights back-office, middle-office, and operations roles as those most at risk. AI’s capabilities are expected to automate routine, repetitive tasks, with customer service functions and know-your-customer (KYC) processes also seeing a significant transformation. Chatbots, for instance, are becoming more proficient at handling client interactions, further reducing the need for human input in these areas.
Despite the anticipated reductions, Noetzel notes that AI will not entirely eliminate jobs but will drive a transformation in the workforce. He adds that while existing roles may be replaced, others will likely emerge as technology evolves.
Citi’s analysis underscores the broader implications of AI in the banking sector. In a report released earlier, Citi projected that 54% of banking jobs are highly susceptible to automation—more than any other industry—and an additional 12% are likely to experience “augmentation” through AI tools. The Citi report stated, “Long-established jobs have been eliminated in past periods of technological transformation, to be replaced by new ones. Many firms have vanished too. AI will repeat this cycle, possibly speeding it up.”
The ongoing shift presents challenges and opportunities as banks grapple with the delicate balance of cost efficiency and job transformation while adapting to AI’s rapid advancement.