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It seems that no industry is immune to artificial intelligence, in which the financial services sector is confronted with disruption, because AI technologies are in danger of moving a considerable part of its workforce.
Big Wall Street banks are expected to reduce to 200,000 jobs for the next three to five years due to AI adoption, according to Bloomberg Intelligence. This significant reduction in the workforce is mainly attributed to AI’s ability to perform tasks that are traditionally performed by human employees more efficiently and more accurately.
The upcoming job reductions are expected to mainly affect back-office, middle and operational departments, where routine and repetitive tasks occur. Positions with data analysis, assessment of financial trend and risk evaluation are particularly vulnerable, because AI systems can process enormous amounts of information and generate insights at speeds that are much surpassed from human possibilities.
Positions at entry level on Wall Street can also be confronted with an uncertain future, because financial companies are considering reducing new employees with two -thirds, as AI assumes responsibilities that are performed by Junior Analysts.
While the most important information and technology officers predicted an average net reduction of 3%, Bloomberg Intelligence Senior Analyst Tomasz Noetzel, who wrote the report, explained that AI transforms these roles instead of completely eliminating them.
However, almost a quarter of the bank leaders surveyed from large institutions such as Citigroup, JPMorgan and Goldman Sachs anticipate more extensive job losses, ranging from 5% to 10% of their total staff.
This shift to AI is expected to increase the profitability of the bank, with projections that suggest a profit before taxes from 12% to 17% by 2027, which corresponds to an extra $ 180 billion in total profit. Moreover, 80% of the respondents believe that generative AI will improve productivity and turnover in the same time frame by at least 5%.
Response to the workforce
The integration of AI into the financial sector presents a double -edged sword, which means that traditional roles threaten and possibly create new opportunities. Although track relocation is a great concern, there is a growing story that could lead AI to creating new positions and the improvement of existing ones.
This transformation cannot necessarily eliminate jobs, but rather reform, which means that employees have to adapt by acquiring new skills and concentrating on tasks where human judgment and creativity remain irreplaceable.
However, the transition is challenges and requires substantial reviling and educational efforts to prepare the workforce for an economy driven by AI.
Wall Street is expected to demand a different skills than its workforce, because the banking sector is confronted with the most important threat of job relocation of AI compared to other sectors, Bloomberg reported that Citigroup’s research quoted. There will probably be more emphasis on computer science, statistics and data analysis skills. New roles can arise that focus on AI supervision, tackling ethical considerations in AI implementation and the development of AI strategies for financial institutions.
Employees at all levels may have to be entered into continuous education and development of skills to remain relevant in a rapidly changing labor market. Although this transition offers challenges, it also offers opportunities for those who are willing to embrace new technologies and develop expertise in emerging areas. The future of finance can very well be one of those who can work effectively with AI systems, which means that it is use to improve human decision-making and strategic thinking.
