European banks may reduce headcount by 10-20% over the next five years due to AI adoption.
Morgan Stanley estimates AI could improve productivity by nearly 30% across banking operations.
Major lenders including Standard Chartered and HSBC are already exploring AI-linked workforce reductions.
European Banks Could Slash Up to 20% Jobs Amid AI Push
Morgan Stanley says automation and AI-driven productivity gains could reshape hiring across European banks over the next five years
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Summary
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Artificial intelligence (AI) could lead to significant job cuts across European banks over the next few years, according to Morgan Stanley analysts cited by Bloomberg.
AI could improve productivity in banking operations by around 30%, Morgan Stanley analysts led by Giulia Miotto said in a research note on Thursday, according to a Bloomberg report. The analysts estimated that the shift could lead to workforce reductions of 10% to 20% across European banks over the next five years, with much of the decline expected to come through retirements and other voluntary departures.
Banks across the world have been increasing investments in AI tools to automate routine work, improve customer service and reduce operational costs. The trend is now beginning to reshape hiring plans and staffing structures within the financial sector.
AI Push Changes Banking Jobs
Several global banks have already linked restructuring plans to AI adoption. Standard Chartered recently said it plans to cut nearly 8,000 support roles over the next four years as it expands the use of AI and automation. HSBC is also reportedly examining possible workforce reductions, especially in middle and back-office functions, Bloomberg reported earlier this year.
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Germany’s Commerzbank has also highlighted the financial benefits of automation. Chief Executive Officer Bettina Orlopp recently said AI could help the lender save around €350 million in costs within the next few years.
Morgan Stanley analysts said the projected workforce reductions could translate into cost savings of 4% to 9% for banks. They also noted that AI could help lenders generate more revenue by improving product recommendations and customer targeting.
Wider Impact Across Industries
The banking sector is not alone in facing AI-driven disruption. Data from Tenet shows that around 92 million jobs globally could be replaced by AI and other labour market changes by 2030, equivalent to roughly 8% of today’s global workforce.
The report also noted that AI was directly linked to 4.5% of all job losses reported in 2025. Between January and June this year alone, companies disclosed nearly 78,000 tech job cuts tied to AI adoption.
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Experts believe the biggest impact may be on repetitive and administrative work, while new roles linked to AI management, cybersecurity and advanced analytics are expected to emerge over time.