200,000 Jobs at Risk? How AI is Reshaping Wall Street's Workforce

New Delhi: As artificial intelligence (AI) continues to evolve, the financial sector is preparing for significant job losses, according to recent reports. Major Wall Street banks, including Citigroup, JPMorgan, and Goldman Sachs, are likely to cut up to 200,000 jobs within the next three to five years.

The driving force behind these job cuts is AI’s ability to rapidly automate tasks traditionally performed by human workers, especially in back-office, middle-office, and operational roles. The move is seen as a strategy not only to reduce costs but also to increase productivity and profit margins.

AI’s Transformative Effect on Banking Jobs

The job cuts are projected to primarily affect positions that involve routine, repetitive tasks, such as customer service and know-your-customer (KYC) roles.

Bloomberg Intelligence (BI) reports that AI tools will automate and streamline these operations, reducing the need for human workers in such functions. However, while some jobs may be altered, they won’t be entirely eliminated.

Financial Gains Amid Job Cuts

Despite the anticipated job cuts, AI is projected to boost the financial performance of banks. According to Bloomberg Intelligence (BI), AI could increase bank profits by 12% to 17% by 2027, potentially adding as much as $180 billion to the industry’s overall earnings.

A survey revealed that 80% of respondents believe generative AI will enhance productivity and revenue by at least 5% over the next three to five years.

While these advancements offer operational efficiencies, they also raise significant concerns about the future landscape of banking jobs.

The Evolution of Work in Banking: A New Era

Although AI’s rise could reduce the number of jobs in traditional roles, experts such as JPMorgan’s Jamie Dimon suggest that the transformation will also improve work quality, making tasks more efficient and less monotonous.

While AI may phase out certain positions, it could lead to improved work-life balance for employees.