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- Morgan Stanley has doubled its projection – 20% (up from 10%) could lose their jobs
- That's 400,000 European roles – though many could be replaced with other job types
- AI is also helping banks streamline customer targeting to boost revenue further
Morgan Stanley has warned that 20% of European bank workers could be made redundant over the next five years, up from its previous projection of 10% earlier this year.
Doubling the number of affected workers could result in 400,000 job losses across the sector in Europe alone, all as a result of artificial intelligence's impacts on the labor market.
According to a Bloomberg report, generative AI tools have created a 30% uptick in productivity for banks, which now expect to cut operational costs by between 4% and 9%.
AI to impact 400,000 European banking jobs
Just as we've seen in other sectors, it'll be the lowest-paid and entry-level jobs that are most likely to be affected, including back-office processing, middle-office risk monitoring and certain compliance roles, due to the way that AI can automate administrative workflows.
However, Morgan Stanley's projection doesn't necessarily mean that a net 400,000 jobs will be lost. The entire labor market is undergoing a transformation, and the same is true of this sector, where some roles will be phased out entirely and others, like data engineers, will be created.
Besides reshaping jobs, AI might also help banks to boost revenue opportunities by improving customer targeting and running tailored ads and initiatives.
Already, we've heard that global giant HSBC is considering cutting 20,000 roles. Standard Chartered is also planning to reduce its headcount by 8,000, with CEO noting that "lower-value human capital" would be most at risk – a choice of words he later regretted and apologized for.
Ultimately, Morgan Stanley's revised forecast demonstrates that AI is having far quicker impacts on the industry than we'd thought, with heavy regulatory burdens previously thought to have been limiting the technology's pace.
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