Artificial Intelligence is poised to transform the banking industry, potentially automating over half of the sector’s jobs and adding tens of billions of dollars to profits, according to a recent Citi report.
The study reveals that 54% of jobs in banking have a high potential for automation, the highest of any industry, with another 12% having high potential for “augmentation”. While AI in finance is still largely in the proof-of-concept stage, Citi notes, “we’re in a period of rapid and unprecedented transition”.
“Long-established jobs have been eliminated in past periods of technological transformation, to be replaced by new ones,” says the report. “Many firms have vanished too. AI will repeat this cycle, possibly speeding it up.”
While AI’s emergence might spell bad news for job security, it promises significant financial benefits. The global banking industry’s profits could soar to $2 trillion by 2028, a 9% (or $170 billion) increase over the next five years.
Citi predicts that digitally native, cloud-based firms, such as fintechs and Big Tech, will likely adopt AI faster. Agile incumbent banks are expected to follow suit, but those bogged down by tech and culture debt may lag, risking loss of market share.
To avoid falling behind, Citi is empowering 40,000 of its coders to experiment with different AI technologies. Rival JPMorgan has also announced plans to train all new employees in AI, with CEO Jamie Dimon likening AI’s arrival to the development of the printing press and the steam engine.
The report warns that while AI can drive productivity gains, transitioning to a “bot-powered” world raises concerns about data security, regulation, compliance, ethics, and competition. Additionally, the risk of AI chatbots going fully autonomous and negatively affecting businesses or their reputations remains a significant challenge.
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