Thousands of European banking sector workers could lose their jobs due to AI by 2030.
Artificial intelligence (AI) and branch closures will drive this trend over the next five years. This may result in a 10% workforce reduction across the industry, according to a report from the Financial Times (FT) on Wednesday (Dec. 31), which cites a forecast from Morgan Stanley.
The report states that the cuts are occurring as banks strive to save money with AI while moving more operations online. Most job losses will likely come from back-office and middle-office positions, along with roles in risk management and compliance, the FT noted. Morgan Stanley based its analysis on a study of 35 banks with about 2.1 million employees.
“Many banks have reported efficiency gains of 30 percent from AI and further digitalization,” Morgan Stanley stated.
The report mentions that banks have already started to cite AI as a reason for changing their staffing levels. For instance, Dutch lender ABN Amro announced in November that it would reduce about 20% of its full-time staff by 2028. Société Générale CEO Slawomir Krupa warned in March that “nothing is sacred” as he works to cut costs at the French bank.
“We can already see changes in the industries of audit, law, and consulting, but banks aren’t achieving improved efficiency yet,” said Jason Napier, head of European banks research at UBS. “Cost bases are large, and these new powerful tools have yet to be fully implemented.”
“Those who still need persuading that AI will significantly change financial services should spend more time exploring the tools that are already available,” he added.
Research by PYMNTS Intelligence found that 54% of workers who were employed, seeking work, or studying at the time of the survey believed that generative artificial intelligence posed a “significant risk of widespread job displacement.”
This concern was more noticeable among those familiar with generative AI platforms, which reached 57%, compared to 41% among those who were not familiar.
“Despite general concerns about job displacement, 38% of workers feared that generative AI could eventually eliminate their specific jobs,” PYMNTS reported in May. “This personal job fear was higher among those using generative AI at least weekly (50%) compared to unfamiliar users (24%).”
Additional PYMNTS Intelligence examined how AI in banking is entering its “next era.” Here, conversational interfaces are evolving from simple Q&A bots to tools that provide strategic insight and contextual advice.
Importantly, PYMNTS reports that nearly three-quarters of bank customers want more personalization. Embedded conversational AI could reclaim 72% of bank customers by offering a tailored experience.
“Thus, cognitive banking is not just about automation; it’s about personal relevance, timing, and trust,” PYMNTS noted earlier this year.
