Analysis: Banks replace 200,000 employees with AI

Bloomberg Intelligence (BI) has spoken to several banks and financial companies. On average, their information, and technology managers expect around three percent of jobs to be lost. They will be replaced by artificial intelligence in the next three to five years. This process has already begun in the financial sector.

It will primarily affect employees who handle customer-related business processes in the background. But progress is also being made in customer contact in terms of how AI can replace people. Chatbots respond to customer inquiries in call centers and via chat. Other companies, such as Amazon, have also been testing this for years. However, generative AI and the quality of the new AI chatbots have recently brought significant progress for customer service. In the next step, so-called AI agents will be given even more opportunities to not only answer customer inquiries, but also to process them, for example by arranging for documents to be sent.

Tomasz Noetzel, author of the Bloomberg Intelligence (BI) study, says that all jobs involving routines and repetitive tasks could be affected: “However, AI will not be able to take over everything, but will initiate a transformation. As a rule, tasks have to be controlled by humans; this is known as human-in-the-loop. There will also be new jobs for the development, implementation, and monitoring of AI applications.

Estimates of job losses have already been gloomier

Some executives surveyed, for example from JPMorgan, Citigroup and Goldman Sachs, expect even more drastic changes and job cuts of up to ten percent. US banks are already considering reducing the number of new hires. The Swedish company Klarna is already claiming that it will no longer be hiring people because AI can do their jobs. Within a year, 22 percent fewer people have been employed there. It is unclear how much PR is behind these statements. There are dozens of jobs advertised on Klarna's website.

At the same time as cutting jobs, the institutions surveyed expect to make higher profits. The BI report is about a potential increase in pre-tax profits of 17 percent by 2027 – which would correspond to 180 billion US dollars.

However, the outlook for bank staff has been gloomier in the past. As recently as last autumn, a Citigroup report stated that more than half of all jobs were at risk. Ultimately, the figures are based on estimates from managers in commercial enterprises.

(emw)