Key Points
- A Morgan Stanley report predicts that 200,000 European banking jobs are at risk by 2030.
- The job cuts will primarily affect back-office roles such as compliance and risk management.
- AI is expected to deliver around 30% efficiency gains in these areas.
- JPMorgan’s CEO warns that cutting junior roles could hurt long-term skills training.
Artificial intelligence is already costing people their jobs in the tech industry, and now it appears the banking industry is next in line. A new Morgan Stanley report predicts that AI could put as many as 200,000 European banking jobs at risk by 2030. That number represents about 10% of the entire finance workforce across 35 of the continent’s major banks.
The job cuts won’t target high-profile traders or investment bankers. Instead, the report suggests that most of the losses will hit back- and middle-office roles. This includes roles such as risk management and compliance, where AI can perform tasks with approximately 30% greater efficiency than humans.
This trend follows years of banks cutting costs by closing thousands of physical branches, a move that has drawn criticism.
However, not everyone thinks this is a straightforward win for the banks. JPMorgan Chase CEO Jamie Dimon has warned that eliminating junior roles could be a significant long-term mistake. He argues that while it saves money now, it destroys the training ground for future leaders. This could create a significant skills gap in the future.
In fact, Dimon suggested that AI could benefit employees, potentially leading to shorter workweeks and a better work-life balance.
So why is this happening now? The banking industry is heavily regulated, which has slowed AI adoption. But with more and more compliant AI tools becoming available, the industry is finally ready to make a change. The same wave of automation that has already hit tech and retail workers could soon crash into the world of finance.
