European banks are preparing for a structural transformation, with AI expected to boost efficiency while significantly reducing staff across the sector.
According to a Morgan Stanley analysis reported by the Financial Times, more than 200,000 jobs, roughly 10% of the workforce at 35 major European banks, could be eliminated by 2030 as lenders increasingly rely on AI and reduce physical branch networks.
Banks project that automation could improve efficiency by up to 30%, making AI a powerful tool for cost reduction.
“This is about reengineering the way banks operate, not just cutting costs,” said a banking analyst. “AI allows institutions to streamline operations while reallocating human capital toward strategic and client-facing roles, but the short-term workforce disruption will be significant”.
Some institutions have already begun implementing large-scale layoffs. Dutch lender ABN Amro plans to cut a fifth of its staff by 2028, while Société Générale’s CEO warned that “nothing is sacred”, signaling that no department is immune from automation. These announcements have drawn investor attention as markets weigh potential savings against reputational and operational risks.
Industry experts are urging caution. A JPMorgan Chase executive told the Financial Times that if junior bankers do not master core banking fundamentals, “it could come back to haunt the industry”, highlighting concerns over skill erosion and long-term operational resilience.
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