AI is coming for European bank jobs, with Italy taking a hit

Rome: European banks are beginning to cut staff costs by deploying artificial intelligence tools, with Italian lender BPER Banca becoming one of the first to put hard numbers on the impact.

BPER said on Oct 10 that it plans to reduce its workforce by about 2,000 over the coming years as advances in AI boost output. The bank will rely on “AI/GenAI-enabled process optimisation and automation” to cut headcount by 10 per cent through 2027 to about 18,500.

The Italian bank joins a growing number of lenders in betting on traditional and generative artificial intelligence to improve efficiency and reduce costs.

Citigroup has said that the technology is likely to displace more jobs across the banking industry than in any other sector, helping to increase profitability in the sector globally by US$170 billion (S$222 billion) over the next few years.

In Europe, UBS Group has developed an artificial intelligence tool to help it offer clients potential M&A deals, able to analyse a database of over 300,000 companies in less than half a minute, while CaixaBank, Spain’s third-largest bank by market value, is planning to create a team of hundreds of artificial intelligence and IT experts.

The Spanish lender is planning to make AI one of the pillars of a new strategy it plans to unveil in November, Bloomberg reported last week.

JPMorgan Chase & Co is scooping up talent, and chief executive officer Jamie Dimon has said he believes the technology will allow employers to shrink the work week to just 3.5 days. Deutsche Bank is using artificial intelligence to scan wealthy-client portfolios. And ING Group is screening for potential defaulters.

BPER’s staff reduction is to take place “through voluntary exits already agreed upon and natural turnover”, it said on Oct 10.

Other measures such as shifting sales from branches to digital channels will also play a role in shedding roles, it said.

The measures will result in about 3,100 overall departures through 2027, with the lender simultaneously aiming to make 1,100 new hires in “strategic areas”, including information technology.