Europeâs Banking Sector Faces Major Job Cuts as AI Takes Over
The banking sector in Europe is on the brink of a major transformation as AI technology becomes more prevalent. According to a recent analysis by Morgan Stanley, as reported by the Financial Times, over 200,000 banking jobs in Europe could disappear by 2030. This represents approximately 10% of the workforce at 35 major banks in the region.
These job cuts are expected to impact back-office operations, risk management, and compliance the most. These areas, while essential to the functioning of banks, are seen as ripe for automation through algorithms that can process data faster and more accurately than humans. Banks are eyeing potential efficiency gains of up to 30% as a result of these changes.
While Europe is at the forefront of this shift, the trend is not limited to the region. In the United States, Goldman Sachs announced job cuts and a hiring freeze through 2025 as part of their AI initiative, known as âOneGS 3.0.â This initiative aims to streamline various processes within the bank, from client onboarding to regulatory reporting.
Some banks have already begun implementing these changes. ABN Amro, a Dutch lender, plans to reduce its staff by 20% by 2028. Similarly, SociĂ©tĂ© GĂ©nĂ©rale’s CEO has stated that “nothing is sacred” in terms of potential job cuts. However, not all banking leaders are fully onboard with this approach. A JPMorgan Chase executive cautioned that if junior bankers are not given the opportunity to learn key fundamentals, it could have negative repercussions for the industry in the long run.
