Morgan Stanley Warns AI Will Cut 10-20% of Jobs in European Banks
Morgan Stanley released a report stating that AI could reduce jobs in European banks by 10% to 20% over the next five years, primarily affecting back-office operations, middle-office support, and some customer service functions.
Market mechanisms indicate that European banks are accelerating their AI investment budgets and optimizing personnel; event-driven funds are shifting from high-labor-cost banks to AI technology leaders; AI financial automation tool providers are benefiting, while traditional labor-intensive banks are under pressure.
Source: Public Information
ABAB AI Insight
Morgan Stanley has previously predicted the impact of AI on financial employment multiple times. European banks have already deployed AI pilots in areas such as compliance review, credit assessment, and anti-money laundering. This 10-20% prediction reflects the accelerated shift of generative AI from an auxiliary tool to large-scale job replacement.
In terms of capital pathways, European banks are reallocating resources from labor costs to AI system procurement and integration, releasing cash flow through job optimization to enhance digital competitiveness while addressing ongoing high operational cost pressures.
Similar to the path of large U.S. banks reducing back-office jobs through AI from 2023 to 2025, and the long-standing high labor cost structure faced by European banks; the current European financial industry is at a critical stage of transitioning from traditional labor-driven operations to AI automation.
Essentially, this is a technological substitution, where standardized repetitive labor positions in banks are replaced by algorithmic processing through AI automation. The mechanism lies in AI's ability to execute rule-based tasks with high precision 24/7, significantly reducing marginal costs, forcing capital to concentrate from labor-intensive operations to technological infrastructure, while accelerating industry slimming and differentiation.
ABAB News · Cognitive Law
The jobs that AI eliminates first are never the most complex, but the most standardized. When banks use AI to cut jobs, what is truly scarce are those who can harness AI, not those who are replaced. Technological progress always pays the price first, then delivers efficiency.