- Morgan Stanley warns that roughly 10% of jobs at 35 major European banks—about 212,000 roles—could be cut by 2030 due to AI, digitalisation, and branch closures.
- Job losses are expected to concentrate in central services such as back-office, middle-office, risk management, and compliance as banks automate and streamline operations.
- Banks are targeting efficiency gains of up to 30% amid pressure to improve weak returns versus U.S. peers, driving aggressive cost-cutting at groups like ABN Amro and Société Générale.
- Experiments such as UBS’s AI analyst avatars highlight both the potential of automation and concerns from executives like JPMorgan’s EMEA co-CEO about eroding junior staff skills.
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The forecast by Morgan Stanley, reported in the Financial Times and widely corroborated, signals a substantial restructuring across Europe’s banking sector by 2030. It predicts that roughly 10% of the workforce in 35 major lenders—about 212,000 people—will be impacted by AI, digitalisation, and branch shutdowns, especially in central service areas. These changes aren’t hypothetical: institutions like ABN Amro and Société Générale have already begun implementing severe workforce and cost-base reductions.
Efficiency gain projections of up to ~30% act as both goalposts and pressure points. Many banks still operate with elevated cost-to-income ratios, especially in consumer banking sectors and in countries like France and Germany. The drive to close branches, automate middle and back-office functions, and consolidate risk and compliance operations stems from both technological capability and shareholder demands.
Front-office innovation is also occurring: UBS’s experiment turning analysts into AI avatars to produce videos of research notes serves as a case study in scaling client communications. But adoption introduces risk—overreliance on AI may erode skill development among junior employees, as highlighted by JPMorgan’s leadership. Striking a balance will be essential to preserve institutional knowledge, maintain regulatory compliance, and manage operational risk.
Strategic implications are significant:
- Bank managements will need to plan for large-scale workforce transitions: reskilling programs, early retirements, redeployment, possibly regulatory or union negotiations.
- Risk management and compliance functions—already crucial under regulatory scrutiny—may be stretched if cuts are pushed too far without maintaining core human oversight.
- Competitive positioning may diverge: those banks that adopt AI effectively and manage the human side well may gain cost advantage, but others may lag or incur reputational/operational risks.
- Policymakers and regulators will need to assess whether labour regulations, audit and compliance standards, and legal frameworks are keeping pace with automation and its displacements.
Supporting Notes
- Analysis covers ~35 European banks employing ~2.12 million people.
- Morgan Stanley estimates 10% job reduction equates to ~212,000 roles cut by 2030.
- Primary reductions expected in central services: back-office, middle-office, risk management, compliance.
- Banks project efficiency gains up to 30% from AI and digitalisation.
- ABN Amro has announced plans to reduce its staff by ~20% by 2028.
- Société Générale’s CEO slawomir Krupa said “nothing is sacred” in its cost-cutting drive.
- UBS is using AI avatars for client research videos; ~36 analysts (~5%) participated to date.
- JPMorgan Co-CEO for EMEA cautioned that rushing AI adoption without ensuring junior staff understand core fundamentals could lead to systemic skill gaps.
Sources
- www.ft.com (Financial Times) — December 31, 2025
- www.finextra.com (Finextra) — December 31, 2025
- www.businessinsider.com (Business Insider) — May 23, 2025