20% of European Bank jobs at risk due to AI replacement, Morgan Stanley says (www.techradar.com)

Morgan Stanley has revised its forecast, now predicting that 20% of banking jobs in Europe—approximately 400,000 roles—could be at risk due to the rising influence of artificial intelligence over the next five years. This figure has doubled from the previous estimate of 10%, highlighting the accelerated impact of AI on the sector. The majority of affected positions are expected to be lower-paying, entry-level roles related to back-office processing and compliance, as generative AI tools demonstrate a 30% increase in productivity, leading banks to anticipate operational cost reductions of 4% to 9%. While this projection raises concerns about significant job losses, it also reflects a broader transformation within the labor market. As certain roles become obsolete, new job categories, such as data engineering, are likely to emerge, indicating a shift rather than an outright decline in employment. Moreover, AI is set to enhance revenue generation for banks through improved customer targeting and personalized initiatives. Morgan Stanley's findings suggest that advancements in AI are progressing more rapidly than previously anticipated, challenging traditional regulatory barriers and reshaping the future landscape of employment in the financial sector.