European banking jobs face AI reset ‘not mass job losses

European banking jobs are in line for a boost from AI despite widespread fears the integration of new tech will trigger mass layoffs, according to fresh analysis.

The headcount at the top lenders is expected to get a four per cent average uplift, analysts from Bloomberg Intelligence said in a new note.

The increase is expected to come as part of a trade off between vulnerable middle-office positions and a surge in hiring for engineering staff.

Tomasz Noetzel, senior industry analyst at Bloomberg Intelligence, said: “European bank’s 2.7m workforce faces AI realignment, not mass job losses, for now.”

He added: “AI is currently displacing routine roles while driving demand for new data science and engineering staff.”

Banks have bullishly embraced AI over the last 12 months amid an escalating tech arms race between the industry’s giants.

In a bid to leverage AI’s opportunities, Lloyds Banking Group put its top boss and senior executives through a six-month AI bootcamp as part of its commitment to embed the tech across operations.

But the new analysis comes as a counter-point to previous research, which has suggested AI threatens to cull jobs across the banking sector.

Banks respond to AI shakeup

Research from Juniper last year suggested banks would cut 178m work hours over the next five years. This push is estimated to put some 27,000 roles at risk – representing ten per cent of the UK banking sector’s workforce. 

British banks were also on the chopping block last year with figures from The Banker showing jobs were shed at the steepest rate since 2018 amid an industry-wide digital push.

Total employee numbers at British lenders slumped 5.25 per cent to 580,371, falling to the lowest number in a decade.

Standard Chartered and HSBC made the biggest culls at 4.5 per cent and 4.3 per cent.

HSBC’s chief Georges Elhedery has moved swiftly to slash costs across operations, which has included a drastic reduction in investment bankers. The lender has a global headcount of 211,304 as of December 2024 and 34,700 in the UK alone.

City AM revealed earlier this month that Lloyds had placed thousands of jobs under review as part of a ploy to beef up its engineering teams and modernise its digital banking offer. 

Over on Wall Street, Jamie Dimon, the boss of US banking titan JP Morgan, told the Davos Economic Forumn earlier this year the bank would likely have fewer employees in five years time as the rollout of tech continues.