In the halls of European banks, the silence of profound change replaces the noise of objection. Artificial intelligence, which entered the sector with the aim of enhancing performance, is reshaping the entire banking landscape, amid increasing warnings of unprecedented job losses.
According to a report published by the “Financial Times,” analysts at “Morgan Stanley” expect that the digital transformation and the rapid expansion in the use of artificial intelligence will threaten more than 200,000 jobs in the European banking sector over the next five years. Banks are likely to reduce nearly 10% of their workforce by 2030, which is equivalent to about 212,000 jobs out of a total of 2.12 million employees in 35 banks included in the analysis.
The expected reductions are concentrated in the administrative departments, especially in back and middle office functions, as well as risk and compliance departments, as banks seek to achieve efficiency gains of up to 30% through artificial intelligence and digitization, after exhausting traditional means of cost reduction.
The report attributes this trend to increasing pressure from investors to increase the return on equity, which is still below its level in the United States. Some banks have already begun translating this pressure into action, as the Dutch bank “ABN Amro” announced its intention to reduce about one-fifth of its full-time employees by 2028, while the CEO of “Societe Generale” stated that cost reduction does not exclude any sector within the bank.
The newspaper warns that the impact of artificial intelligence will be more evident in banks that deal with individuals, especially in countries such as France and Germany where the cost-to-income ratios are still high. In this context, analysts at “UBS” point out that technology has begun to change the nature of banking, with reliance on advanced artificial intelligence tools in communicating with customers.
In contrast, this technical trend is accompanied by professional concerns, as experts warn of the loss of basic banking skills, calling for a balance between accelerating operations with artificial intelligence and ensuring that young generations are trained in the essence of banking, so that digital efficiency does not turn into a long-term human cost.
