LONDON (Realist English). More than 200,000 jobs in Europe’s banking sector could be eliminated over the next five years as lenders accelerate the adoption of artificial intelligence and push ahead with branch closures, according to estimates by analysts at Morgan Stanley.
The bank projects that European lenders may cut around 10% of their workforce by 2030 as they seek efficiency gains from AI and deeper digitalisation. The forecast, based on an analysis of 35 banks employing a combined 2.12 million people, implies potential job losses of about 212,000.
The largest reductions are expected in “central services” roles, including back- and middle-office functions, as well as risk management and compliance, where automation can most easily replace routine tasks. Morgan Stanley said many banks are targeting efficiency improvements of up to 30% through AI-driven systems.
Europe’s banks are under sustained pressure from investors to reduce costs and boost returns on equity, which continue to trail those of US peers. With earlier restructuring programmes losing momentum, analysts say AI has emerged as a new lever to improve cost-to-income ratios — a key measure of operational efficiency.
Several lenders have already announced major cuts. Dutch bank ABN Amro said in November it plans to reduce its full-time workforce by about 20% by 2028. In France, Société Générale chief executive Slawomir Krupa warned earlier this year that “nothing is sacred” in efforts to tackle the bank’s high cost base.
Analysts at UBS say the impact of AI could be especially pronounced at retail-focused lenders and in countries such as France and Germany, where efficiency ratios remain high. UBS has begun using AI to create digital avatars of its analysts for client briefings, and recently sent 250 senior executives to an AI leadership programme at University of Oxford, according to people familiar with the initiative.
Still, some senior bankers have urged caution. Conor Hillery, co-chief executive for Europe, the Middle East and Africa at JPMorgan Chase, warned that the rush to deploy AI risks undermining core skills if not carefully managed.
“The danger is losing sight of the fundamentals,” Hillery said, stressing the need to ensure junior bankers continue to learn essential tasks such as financial modelling and valuation even as AI tools become more widespread.
