The utilization of artificial intelligence is expected to result in significant job losses in the financial industry in the coming years, according to Financial Advisor and Bloomberg Intelligence.
With AI continuing to perform certain tasks more efficiently than human workers, industry analysts estimate that global banks may reduce their workforces by up to 200,000 jobs over the next three to five years.
BI surveyed chief information and technology officers for firms, who said they expected to cut staffing by a net 3% as their operations are transformed by AI.
The job cuts are expected to primarily affect back-office, middle-office and operational departments, which include more routine and repetitive tasks. Positions involving data analysis, financial trend assessment and risk evaluation are seen as especially vulnerable, as AI systems can process vast amounts of information and generate insights at far higher speeds than humans. The impact will extend to customer services, where bots will increasingly manage client functions.
“Any jobs involving routine, repetitive tasks are at risk,” said Tomasz Noetzel, the BI senior analyst who wrote the report. “But AI will not eliminate them fully, rather it will lead to workforce transformation.”
Nearly a quarter of the surveyed banking executives from major institutions such as Citigroup, JPMorgan and Goldman Sachs said they expect a larger amount of their job losses in their firms of between 5% and 10%.
While artificial intelligence is replacing some workers, it is also resulting in increased productivity for firms that is translating into higher profits. In 2027, banks could see pretax profits 12% to 17% higher than they would have otherwise due to AI, the report said. Eight in ten respondents expect generative AI to increase productivity and revenue generation by at least 5% in the next three to five years.
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