Bloomberg Intelligence (BI) has spoken with several banks and financial companies. Their information and technology leaders expect that around three percent of jobs will disappear. In the next three to five years, these jobs will be replaced by Artificial Intelligence (AI). This process has already started in the financial sector.
Employees who handle customer-related business processes in the background will be most affected. However, there are also advancements in customer interaction where AI can replace humans. In call centers and through chat, chatbots respond to customer inquiries. This has been tested for years in other companies like Amazon. Recently, generative AI and the quality of new AI chatbots have brought significant improvements to customer service.
In the next step, so-called AI agents will have even more capabilities. They will not only answer customer inquiries but also handle them, such as by initiating the sending of documents. Tomasz Noetzel, the author of the Bloomberg Intelligence study, says that all jobs with routines and repetitive tasks could be affected. However, AI will not take over everything but will initiate a transformation. Tasks generally need human control, a concept known as Human-in-the-Loop. New jobs will also emerge for the development, implementation, and monitoring of AI applications.
Some estimates of job cuts have been even gloomier. Some of the executives surveyed, such as those from JPMorgan, Citigroup, and Goldman Sachs, expect even more drastic changes and job cuts of up to ten percent. According to them, US banks are already considering reducing new hires. The Swedish company Klarna claims it no longer hires people because AI can do their jobs. Within a year, 22 percent fewer people were employed there. However, it is unclear how much of this is PR. Many job openings are still listed on Klarna’s website.
Along with job cuts, the surveyed institutions expect higher profits. The BI report discusses a potential 17 percent increase in pre-tax profits by 2027, which would amount to 180 billion US dollars.
The outlook for bank staff has been even gloomier in the past. Last fall, a Citigroup report suggested that more than half of all jobs were at risk. Ultimately, these numbers are based on estimates from business executives.