LONDON — Artificial intelligence could displace or eliminate more than 200,000 banking jobs across Europe by the end of the decade, accelerating branch closures and reshaping how banks operate, according to a new forecast from Morgan Stanley.
The projected job losses represent roughly 10% of total banking employment in Europe and reflect banks’ efforts to capture efficiency gains from AI while shifting more functions to digital channels, the Financial Times reported.
Most of the reductions are expected to come from back-office and middle-office roles, as well as positions in risk management and compliance, according to the report. Morgan Stanley based its analysis on a review of 35 banks that collectively employ about 2.1 million workers.
30% Improvements in Deficiencies Cited
“Many banks have quoted efficiency gains coming from AI and further digitalization to the tune of 30%,” Morgan Stanley said, adding that financial institutions are increasingly highlighting automation as a driver of cost savings.
Some banks have already cited AI and digital transformation in plans to overhaul staffing. Dutch lender ABN Amro said in November that it intends to cut about 20% of its full-time workforce by 2028. In France, Société Générale Chief Executive Slawomir Krupa warned in March that “nothing is sacred” in his effort to reduce costs at the bank.
Analysts caution, however, that the promised productivity gains have yet to fully materialize across the sector.
Not Yet Implemented
“We can already see industry changes in audit, law and consulting, but banks aren’t delivering improved efficiency yet,” said Jason Napier, head of European banks research at UBS. “Cost bases are large, and these new powerful tools are yet to be fully implemented.”
The forecast underscores mounting pressure on Europe’s banks to modernize operations as competition intensifies and margins remain under strain, even as labor groups and regulators scrutinize the social impact of large-scale automation.
