One in ten UK banking jobs at risk from AI
Bankers across the UK could be on the chopping block as the industry piles billions into AI.
The push into the modern tech will put some 27,000 roles at risk – representing ten per cent of the UK banking sector’s workforce.
By 2030, banks across the country will have piled over £1.8bn into generative AI by 2030, fresh data shared with CityAM has revealed.
The bullish gen AI plans are set to result in “productivity gains” across the industry, with around 50 per cent of cost-savings coming from back office functions. Near 82 per cent of work hour reductions are set to come from back office and administrative tasks.
The findings, from Juniper Research and Zopa Bank, unveiled banks will cut 178m work hours over the next five years.
The research suggests gen AI developments would equate to 100 per cent return on investment with £1.8bn saved by 2030.
Britain’s Big Four banking giants – HSBC, Natwest, Barclays and Lloyds – have beefed up their AI artillery in the last year as the firms continue to face off in a tech arms race.
Lloyds began its AI expansion last year, with the flagship announcement of its ‘AI Centre for Excellence’ headed up by former Amazon executive Rohit Dhawan. Meanwhile, Natwest joined forces with OpenAI to focus on “bank-wide simplification”.
The pressure has intensified as tech-savvy challengers entered the scene leveraging their abilities to streamline operations.
Zopa kicks off major AI push
Digital bank Zopa has ramped up its AI plans on the back of the new findings.
The fintech has launched a five-year campaign – dubbed Jobs 2030 – with the aim to reskill 100,000 banking workers in AI disciplines by 2030.
The campaign will include “industry-aligned training tailored specifically to the UK banking sector”, a gen AI Engineering Programme and later the creation of Zopa Coding Academy.
Clare Gambardella, chief customer officer at Zopa Bank, told CityAM the fintech would pull from across the industry to meet the “steep number”.
She added “several fintechs” were dealing with “the same kind of opportunities or challenges” in regards to AI and the campaign would leverage abilities across the sector.
It follows Zopa and fintech peer Clearscore smashing their “25 million actions” target to help UK consumers better their financial resilience in a cost-of-living campaign earlier this year.
Gambardella said the AI campaign would echo the collaborative aspect of Zopa’s personal finance mission through allowing firms to lead education opportunities in their area of expertise.
The mission follows FTSE 100 banking titan Lloyds sending a fleet of its bankers to Cambridge University for “AI bootcamp” earlier this year as the industry races to get ahead of the curve.
AI shakes job market
Gambardella said there would be “a potential risk” of job cuts across the banking industry but added the “reasonably lean” element of fintechs could mitigate this.
She added the fintech sector had a “self select bias” due to workers naturally being a “congruent fit” for AI developments.
UK banks’ integration of AI is set to happen “regardless”, Gambardella said, but added Zopa’s campaign would help “put employees on the front foot”.
It comes after research from The Banker in July revealed British banks were shedding workers at the fastest pace since 2019
Beyond financial services, the wider labour market has been shaken by the AI revolution.
Vacancies for graduate roles, apprenticeships, internships, and junior positions have decreased by more than 30 per cent since ChatGPT emerged at the end of 2022, research from Adzuna revealed earlier this year.
The impact has taken advertised vacancies for graduates to their lowest level since July 2020 – when the British economy was battling the pandemic.
The Big Four accountancy firms – KPMG, Deloitte, EY and PwC – have all stripped back early-career hiring over the last two years, slashing intake by as much as 29 per cent as they honed in on AI.