Global banks will cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers

Global banks are poised to cut up to 200,000 jobs over the next three to five years as artificial intelligence (AI) increasingly takes over tasks currently performed by humans, according to Bloomberg Intelligence (BI).

Chief information and technology officers surveyed by BI expect, on average, a net workforce reduction of 3%, as outlined in a report released Thursday.

Roles in back office, middle office, and operations are expected to be most impacted, according to BI senior analyst Tomasz Noetzel. Customer service functions could also face changes as bots take on client-related tasks, while know-your-customer (KYC) duties may be particularly vulnerable. “Jobs involving routine, repetitive tasks are most at risk,” Noetzel said. “But AI won’t eliminate them entirely—it will lead to a transformation of the workforce.”

Nearly 25% of the 93 respondents anticipate deeper cuts of 5% to 10% of total staff. The surveyed peer group includes major banks like Citigroup Inc., JPMorgan Chase & Co., and Goldman Sachs Group Inc.

The industry is expected to undergo sweeping changes that could significantly boost earnings. By 2027, AI-driven productivity gains could raise banks’ pretax profits by 12% to 17%, adding as much as $180 billion to their combined bottom line, BI projects. Moreover, 80% of respondents anticipate AI will increase productivity and revenue by at least 5% within the next three to five years.

Banks have been investing heavily in modernizing IT systems to streamline processes and cut costs since the financial crisis, and many are now adopting advanced AI tools to further enhance efficiency.

A June report by Citi predicted that AI could displace more banking jobs than in any other sector. The report noted that about 54% of banking roles have a high potential for automation.

Despite the anticipated job cuts, many firms emphasize that technology will transform roles rather than replace them entirely. In November, Teresa Heitsenrether, who oversees JPMorgan’s AI initiatives, stated that the bank’s use of generative AI has so far augmented jobs instead of eliminating them.

JPMorgan CEO Jamie Dimon has highlighted AI’s potential to dramatically improve workers’ quality of life, even if some positions are eliminated. Speaking to Bloomberg Television in 2023, Dimon said, “Your children are going to live to 100 and not have cancer because of technology. And they’ll probably be working three-and-a-half days a week.”