European banks are starting to cut staff costs by deploying AI tools, with Italy’s BPER Banca SpA one of the first to publish data on the impact AI is having on jobs.
The Italian bank on Thursday revealed plans to cut its workforce by around 2,000 people over the next few years as advances in artificial intelligence boost production. The bank will rely on “AI/GenAI-enabled process optimization and automation” to reduce headcount by 10% by 2027 to around 18,500, it said in a statement.
Citigroup Inc. for its part, it said technology is likely to wipe out more jobs across the banking industry than in any other sector, helping to boost the sector’s profitability globally by $170 billion over the next few years.
In Europe, UBS Group AG has developed an artificial intelligence tool to help it pitch clients on potential M&A deals, capable of analyzing a database of more than 300,000 companies in less than half a minute. Deutsche Bank AG also uses artificial intelligence to scan the portfolios of wealthy clients. And ING Groep NV is considering using AI to identify potential defaulters.
Otherwise, JPMorgan Chase & Co. brings together talent, and CEO Jamie Dimon said he believes the technology will allow employers to shrink the work week to just 3.5 days.
The example of BPER
BPER’s staff reduction is to take place “through voluntary redundancies that have already been agreed and natural turnover”, the bank said. Other measures, such as the shift of sales from branches to digital platforms, will also play a role in job cuts.
The measures will lead to around 3,100 total departures by 2027, with the bank simultaneously targeting 1,100 new hires in “strategic areas”, including IT.
Spain’s CaixaBank plans to build a team of hundreds of artificial intelligence and IT experts as it prepares to highlight the emerging technology as a pillar of a new strategy it is scheduled to unveil next month, according to Bloomberg.
For BPER, the projected reduction in its overall workforce will be partially offset by hiring. While the Italian bank anticipates around 3,100 total departures by 2027, it aims to hire 1,100 new employees over the same period. These will be added to “strategic sectors” including IT, the Italian bank said in a statement.
