AI and Automation Will Dramatically Reduce Financial Sector Jobs Says Citi
Bloomberg is reporting on a study from Citi that predicts a dramatic decline in financial sector jobs over the next eight years. The catalyst will be the combination of AI and automation. According to the report, the industry will trim 30% of its jobs between 2015 and 2025. That would result in about 770,000 fewer jobs in the U.S. and a decline of 1 million in Europe. Former Citigroup CEO Vikram Pandit told Bloomberg that this 30% drop could come in just five years.
AI Will Reduce White Collar Jobs
There is a lot of concern about how AI will impact blue collar service jobs. The most oft-cited impact is how self-driving cars will eliminate the 4.4 million ground transportation jobs in the U.S. That may happen eventually although there are competing views that say the impact will not be particularly high. However, the impact of the self-driving car and truck revolution is many years away. There are not only technical hurdles but also legal and public policy frameworks that will invariably slow the realization of a driverless future.
By contrast, white collar service jobs are immediately candidates for displacement by AI and automation. Many knowledge workers that rely on human intelligence will inevitably be replaced by artificial intelligence. And, many administrative jobs that involve complex variables will soon become candidates for automation. Go to your local bank. See if it is has lower staffing levels than two years ago. Also notice if the tellers are anxious to tell you about all of their great online banking capabilities. The trend is already underway.
The AI Jobs Impact is Already Happening
We learned earlier this year that a Japanese insurer was replacing 34 employees with IBM Watson. That is a direct impact of AI and jobs that is expected to save Fukoku Life Insurance ¥140 million annually. AI is going to create a lot of jobs and eliminate many more. First up will be white collar services. That’s pretty much the only description for Financial Services jobs.