Last time when you wanted to withdraw money from a bank, you’d have to go to the counter and speak to someone in person. Then ATMs came along, which reduced the need for human interaction, but banks aren’t stopping there. According to a report from the Financial Times, banks in Europe are expected to cut 200,000 jobs as AI takes over.
Banks to cut jobs in favor of AI
We can’t say that this news comes as a surprise. We’re seeing banks increase their reliance on technology. For instance, the rise of digital banks already means fewer traditional banking jobs, especially since these digital banks do not require a physical location. This means that there’s no need for bank tellers, office managers, security personnel, rent, utilities, and ATMs.
So, the idea is that banks could cut even more jobs in favor of AI? Yea, that didn’t exactly come out of left field. According to the Morgan Stanley analysis, more than 200,000 banking jobs in the EU could vanish by 2030. That represents about 10% of the workforce at 35 major banks across the region.
Back-office operations, risk management, and compliance are likely to be the most affected jobs. This won’t be an EU-only problem either. Goldman Sachs had also previously warned US employees of job cuts and a hiring freeze through the end of 2025.
Why AI makes sense, and the dangers
In addition to reducing the amount of money banks have to spend on staff and rental for their physical locations, there are other reasons why banks are turning to AI. The most obvious would be efficiency.
Unlike humans who need to take lunch breaks or vacations, AI can work around the clock. AI also can work a lot faster, going through records and spreadsheets in minutes. Minutes that would have otherwise taken human hours or days to go through, assuming there are no mistakes, either. This makes it easier for banks to assess reports, loan applications, and more.
However, this does not mean the system is perfect. Back in 2025, Deloitte Australia was caught using AI to generate a report for the Department of Employment and Workplace Relations (DEWR). This wouldn’t have been an issue had it not cost DEWR $440,000 to commission the report. Or if the report wasn’t riddled with errors. This included three nonexistent academic references and even a made-up quote from a Federal Court judgment.
This suggests that while there are advantages to automating systems with AI, AI is far from perfect, and an overreliance could end up causing more harm than good.