Wall Street banks are poised to slash up to 200,000 jobs over the next three to five years as artificial intelligence begins to replace roles once considered irreplaceable.
Bloomberg reports that the banking industry is on the precipice of a major transformation as artificial intelligence (AI) begins to encroach on tasks currently performed by human workers. According to a recent report by Bloomberg Intelligence, global banks could cut as many as 200,000 jobs in the next three to five years, with back office, middle office, and operations roles being the most vulnerable.
The report, based on a survey of chief information and technology officers from major banks, indicates that on average, banks expect a net three percent reduction in their workforce due to the implementation of AI. However, nearly a quarter of the respondents predict an even steeper decline, with job losses ranging between five and 10% percentof their total headcount. The peer group covered by Bloomberg Intelligence includes industry giants such as Citigroup, JPMorgan Chase, and Goldman Sachs Group.
Tomasz Noetzel, the senior analyst at Bloomberg Intelligence who authored the report, stated that “any jobs involving routine, repetitive tasks are at risk.” He added, “But AI will not eliminate them fully, rather it will lead to workforce transformation.” Customer service roles could see significant changes as AI-powered bots take over client functions, while know-your-customer duties are also likely to be impacted.
The widespread adoption of AI is expected to have far-reaching consequences for the industry, ultimately leading to improved earnings. According to Bloomberg Intelligence, banks could see their pretax profits surge by 12 to 17 percent in 2027 compared to what they would have been without AI, potentially adding up to $180 billion to their combined bottom line. This boost in profitability is expected to be driven by increased productivity, with eight in ten respondents anticipating that generative AI will enhance productivity and revenue generation by at least five percent over the next three to five years.
Banks have been investing heavily in modernizing their IT systems in the wake of the financial crisis, aiming to streamline processes and reduce costs. The emergence of a new generation of AI tools has further fueled this trend, with banks eagerly adopting these technologies to improve efficiency and productivity.
Despite the potential for significant job losses, many firms have emphasized that the shift towards AI will result in roles being augmented by technology rather than being entirely replaced. Teresa Heitsenrether, who oversees JPMorgan’s AI efforts, stated in November that the bank’s adoption of generative AI was thus far enhancing jobs rather than eliminating them.
Jamie Dimon, CEO of JPMorgan, has also expressed optimism about the impact of AI on workers’ quality of life. In a November interview with Bloomberg Television, Dimon predicted that AI would lead to dramatic improvements, even if it results in the elimination of some positions. “Your children are going to live to 100 and not have cancer because of technology,” he said. “And literally they’ll probably be working three-and-a-half days a week.”
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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