The European banking sector is undergoing a major transformation as banks embrace AI technology and close physical branches. A recent Morgan Stanley analysis, cited by the Financial Times, warns that over 200,000 jobs could disappear by 2030.
This would represent roughly 10% of the workforce across 35 major European banks. The downsizing will largely affect back-office operations, risk management, and compliance departments. AI algorithms can process data faster and more efficiently than humans, allowing banks to aim for up to 30% efficiency gains, the report says.
Job reductions are not limited to Europe. In October, Goldman Sachs announced potential U.S. job cuts and a hiring freeze under its “OneGS 3.0” AI initiative.The plan focuses on areas such as client onboarding, regulatory reporting, and other routine banking tasks.
Several European banks have revealed significant workforce reductions. Dutch lender ABN Amro plans to cut a fifth of its staff by 2028, while Société Générale’s CEO warned that “nothing is sacred” in the efficiency drive.
Despite the push, some executives caution against moving too fast. A JPMorgan Chase representative told the Financial Times that if junior bankers skip learning core banking fundamentals, the sector may face problems in the long term.
The European banking sector’s transformation highlights the tension between automation and human expertise. Banks must balance cost-cutting with maintaining skilled staff capable of managing complex financial and regulatory challenges.
Experts predict that while AI adoption will improve efficiency and reduce operational costs, the cultural and training impact on the workforce will be significant. European banks are now navigating a careful path to modernize without undermining essential human expertise.
The coming decade will test whether the European banking sector can successfully integrate AI while preserving institutional knowledge and stability.
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