Is AI Coming for Your Banking Job? Citi Report Analyzes Impact

Emmalyse Brownstein, in Business Insider, cited a recent Citi report that indicates a possible technological revolution for the banking sector. The research suggests that more than half of banking jobs could be automated by AI. 

Preparing for the Future: How Banks Can Adapt to AI 

“About 67 percent of banking jobs have ‘higher potential’ to be automated or augmented by AI,” the report predicts, citing data from Accenture Research and the World Economic Forum. 

The transformation will not unfold without challenges. “While general-purpose technologies, or GPTs, create new opportunities for innovation and can improve quality of life, they also destroy existing ways of doing things,” the report notes. As banks adapt, there will be both winners and losers, particularly in the short term. 

The Financial Upside of AI Adoption in the Banking Sector 

Despite the potential for job displacement, a significant upside may also emerge. 

Citi estimates that the profit pool for the global banking sector “…could increase nine percent ($170 billion) from the adoption of AI, rising from just over $1.7 trillion to close to $2 trillion.” 

This financial boost underscores AI’s transformative power to enhance operational efficiency and profitability. 

Regulation and Readiness: Hurdles to Widespread AI Use in Finance 

The timeline for AI adoption in finance, however, is expected to unfold gradually. 

“The pace of implementing modern AI tools in financial services, in particular, GenAI, will be relatively slow when compared to other sectors,” the Citi researchers explain. This sluggishness is attributed to the “…highly regulated nature of the sector and lack of ‘ready to go globally aligned rules.'” 

Supporting this cautious approach, a 2022 Bank of England survey found that “72 percent of firms reported using or developing machine learning [ML] applications.” Despite these adopters, the median number of ML applications for mainstream UK financial institutions was just 20–30. Furthermore, “…less than 20 percent of the already few AI use cases were critical to business.” 

A Glimpse into the Future: How AI Will Reshape Banking 

“What a bank or financial firm looks like in the mid-2020s, be it retail or wholesale finance, looks very different to the mid-1980s, or the mid-1940s,” Citi’s researchers note. AI is expected to accelerate these changes, making the financial landscape of the 2020s markedly different from previous decades.

To read this analysis in its entirety, see the Business Insider article, where the report also offers a glimpse into the future of the banking industry.