European banking sector set to cut 200,000 jobs amid AI takeover

The European banking sector is facing a significant overhaul as lenders increasingly adopt AI technology and close physical branches.

A recent Morgan Stanley analysis, cited by the Financial Times, suggests this efficiency drive could lead to the loss of over 200,000 jobs—approximately 10% of the workforce across 35 major banks—by 2030. Europe’s banking industry is poised for a difficult lesson in efficiency.

The downsizing will affect back-office operations, risk management, and compliance, the essential backbone of banking, where algorithms are believed to process data faster and more efficiently than humans. Banks are eyeing projected efficiency gains of 30%, according to the Morgan Stanley report.

The cuts aren’t confined to Europe, as Goldman Sachs warned U.S. employees in October of job cuts and a hiring freeze. This is part of an AI push dubbed “OneGS 3.0” that targets everything from client onboarding to regulatory reporting.

Some companies are set to downsize their workforces considerably. Dutch lender ABN Amro plans to cut a fifth of its staff by 2028, while Société Générale’s CEO has declared that “nothing is sacred.”

Yet, some European banking leaders are advising caution, with a JPMorgan Chase executive telling the Financial Times that if junior bankers never learn the fundamentals, it could come back to haunt the industry.