Major banks could axe up to 200,000 jobs within the next five years as artificial intelligence continues to take on new roles and displace human workers, according to new research from Bloomberg Intelligence. 

According to chief information and technology officers at some of the world’s biggest banking institutions, on average 3% of their workforce will be cut, with back office, middle office and operations the most at risk.

As firms begin to roll out more technology, other business areas could be hit, including customer service operations where chatbots might take over critical client facing functions.

“Any jobs involving routine, repetitive tasks are at risk. But AI will not eliminate them fully, rather it will lead to workforce transformation,” said Tomasz Noetzel, the BI senior analyst who wrote the report. 

Bloomberg’s report found that of the ninety-three executives surveyed, nearly a quarter predicted even more job losses, between 5% – 10%, however they also forecast that transformational changes within the industry could lead to a jump in earnings.

The study found that by 2027, banks might see up to 17% more pretax profits than they otherwise would have thanks to the productivity of AI systems. Bloomberg noted that this could add as much as $180 billion (£150.9 billion) to their combined bottom line.

Productivity is considered the key benefit of more AI, with 80% of respondents predicting that genAI will enhance performance, as well as grow revenue by at least 5% in the next three to five years.

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A report from Citi last summer found that the banking industry was the most at risk of job automation, with 54% of jobs could be taken over by systems, with a further 12% of roles that could potentially be augmented by more technology.

That study also found that compared to fintechs and insurance firms, banks were the slowest in terms of adopting AI technology, with 21% not having started the process, compared to just 4% of fintechs and 6% of insurers.

However, as with the latest Bloomberg analysis, Citi also found general consensus over the benefits of adopting more AI, with 93% of those surveyed expecting the technology to lead to an increase in profits within five years, with more than half (52%) predicting it could lead to a 10% bump.