(Bloomberg) — Global banks will cut as many as 200,000 jobs over the next three to five years as artificial intelligence encroaches on tasks currently performed by human workers, according to Bloomberg Intelligence.
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Chief information and technology officers surveyed for BI said they expect, on average, a net cut of 3% of their workforce, according to a report published Thursday.
According to Tomasz Noetzel, the senior BI analyst who authored the report, the back office, middle office and operations are likely to be most at risk. Customer services could see changes as bots manage customer functions, while know-your-customer tasks would also be vulnerable. “All jobs involving routine, repetitive tasks are at risk,” he said. “But AI will not eliminate them completely, but rather lead to a transformation of the workforce.”
Nearly a quarter of the 93 respondents predict a sharper decline of between 5% and 10% of the total workforce. 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 sector, which will translate into improved profits. According to BI, by 2027, banks could see pre-tax profits 12 to 17 percent higher than they would have been otherwise – adding as much as $180 billion to their collective bottom line – as AI enables productivity gains. Eight in 10 respondents expect generative AI to increase productivity and revenue generation by at least 5% over the next three to five years.
Banks, which spent years modernizing their IT systems in the wake of the financial crisis to speed up processes and cut costs, have flocked to 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 in banking than in any other sector. About 54% of banking jobs have high potential for automation, Citi said at the time.
Yet many companies have emphasized that the shift will result in roles being changed by technology, rather than replacing them altogether. Teresa Heitsenrether, who oversees JPMorgan’s AI efforts, said in November that the bank’s adoption of generative AI has increased employment so far.
Jamie Dimon, CEO of JPMorgan, told Bloomberg Television in 2023 that AI will likely make a dramatic improvement in the quality of life for employees, even if it eliminates some functions. “Your children will live to be a hundred years old and will no longer have cancer thanks to technology,” Dimon said at the time. “And literally they will probably work three and a half days a week.”
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