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Artificial Intelligence Could Trigger Massive Job Cuts in European Banks
A report suggests that AI could lead to the loss of over 200,000 jobs in European banks. An analysis by Morgan Stanley claims that lenders, including 35 of Europe's largest banks, could reduce their total workforce by 10 percent over the next five years. Let's explore the details.
The threat of job loss is posed by Artificial Intelligence (AI) in the sense that it may result in the loss of more than 200,000 jobs in banks across Europe by the year 2030. This is according to a report. According to the report, banks, together with the 35 biggest in Europe, might slash their staff by 10 percent in the next five years, thus resulting in a wave of job cuts, according to a study by the investment bank Morgan Stanley. The technology sector has been characterized by job cuts due to the COVID-19 outbreak, with the banking sector potentially encountering a job crisis.
According to a report in the Financial Times, Morgan Stanley analysts predict that widespread adoption of AI and the reduction of physical branches could reduce staffing needs in Europe over the next five years. Banks are reportedly exploring the potential for improved operational efficiency provided by AI systems.
Of the 2.1 million total jobs at risk, 10 percent, or approximately 212,000, are at risk. The publication claims that the largest job losses will occur in back-office operations, risk management, and compliance. According to reports, these roles are considered repetitive or data-intensive and are prime candidates for automation using machine learning and AI tools. Some of these tasks include monitoring transactions, generating reports, and processing large datasets. Algorithms can perform these tasks faster than traditional manual processes, which is one reason banks are interested in technology-based restructuring.
