Artificial intelligence (AI) poses a risk to 200,000 jobs on Wall Street over the next three to five years, according to a Bloomberg survey of major bank executives. The most vulnerable positions are those involving routine and repetitive tasks.
On average, managers from large institutions expect to reduce their workforce by 3% in the coming five years, with some anticipating cuts of 5% to 10%. However, many roles impacted by AI are not expected to disappear entirely. Instead, AI is likely to transform the workforce and the financial industry, leading to a productivity increase of at least 5% according to 80% of executives.
Bloomberg's research also predicts pre-tax profits could rise by 12% to 17% due to AI-driven productivity gains. Since the 2007 financial crisis, major banks have heavily invested in modernizing their IT systems to enhance operations and reduce costs, and they are now focusing on next-generation AI tools.
A June study by Citibank indicated that the banking sector will be more affected by the AI revolution than any other industry, estimating that 54% of jobs in banking could be automated. Nevertheless, most institutions caution that AI will lead to a shift in job roles rather than outright job losses.
Jamie Dimon, CEO of JP Morgan, noted in 2023 that AI could significantly improve workers' quality of life, despite some job eliminations. In his recent letter to shareholders, Dimon compared the societal impact of AI to that of electricity and the internet, emphasizing the extraordinary consequences it could have on businesses and society.