AI threatens 200,000 jobs at European banks by 2030

"Morgan Stanley warns that the European banking sector could lose more than 200,000 jobs over the next four years. AI and branch closures are driving banks to make drastic staff reductions. Investment bank Morgan Stanley expects the sector to cut around 10 percent of jobs by 2030, affecting some 200,000 employees. The analysis covers 35 European banks with a combined workforce of 2.12 million. According to the Financial Times, digitization and AI are the main drivers behind this reorganization."

"The blow is felt most acutely in central services. Back office, middle office, risk management, and compliance are under pressure. But AI tools are also having a profound impact on other departments. Research by EY from 2024 shows that 90 percent of European financial institutions have now embraced AI, with further investments in generative AI systems. Efficiency through automation Banks are reporting significant profits from automation. Many banks have reported efficiency improvements of 30 percent thanks to AI, according to Morgan Stanley."

"This pressure did not come out of nowhere. Investors are demanding that banks reduce costs and improve their return on equity, which still lags behind their American competitors. ABN Amro announced in November that it would cut a fifth of its workforce by 2028. Société Générale CEO Slawomir Krupa went even further, saying "nothing is sacred" in his campaign to cut costs."

Morgan Stanley projects about a 10 percent reduction in European banking jobs by 2030, equating to roughly 200,000 roles across 35 banks and 2.12 million employees. Digitization, AI adoption and branch closures are the primary forces behind workforce cuts. Central services including back office, middle office, risk management and compliance face the most acute pressure, while AI affects many other departments. EY research from 2024 indicates 90 percent of European financial institutions have adopted AI and are investing in generative systems. Banks report efficiency gains near 30 percent from automation as investors push for lower costs and higher returns, prompting major reductions amid cautionary warnings.

Read at Techzine Global