U.S. Bank Executives Say More Job Losses Likely After AI Doubles Productivity

U.S. banks including JPMorgan Chase and Wells Fargo said artificial intelligence will boost productivity at their companies and likely cause job losses.       

JPMorgan Chase’s consumer and community banking chief Marianne Lake said at the Goldman Sachs financial services conference the bank has doubled productivity to 6% with AI, from a previous 3% without it.

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Operation specialists’ productivity is expected to grow by 40% to 50%, Lake said. The higher productivity means less impact jobs on a net basis, she said.

AI represents the biggest technological upheaval to the world economy since the rise of the internet.       

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It has brought trillions of dollars of investment and dizzying stock-market gains, but also a shortage of memory chips, regulatory scrutiny, and rising anxiety about job displacement.      

Wells Fargo CEO Charlie Scharf said the bank has not reduced the number of people, but added “we’re getting a lot more done” because of AI.      

“There are other places out there where we’re gonna be able to look at and figure out, how are we able to do more with less people,” he said.       

“It’s not going to totally replace humans, but does create an opportunity to do things significantly different.”      

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PNC Financial CEO Bill Demchak said the bank’s head count is the same as it was 10 years ago when the bank was a third of the size – all through the process of automation and branch optimization.       

“You know, the big buzz right now is it’s going to continue because AI is going to drive it. But we’ve been on a journey of automation for years, and AI may well be an accelerant,” he said.      

“It will most definitely be an accelerant in our tech headcount.”

Citigroup’s incoming CFO Gonzalo Luchetti said the bank has seen a 9% productivity increase on the coding front.

“Not only can we increase the self-service ratio, which we’re already seeing and doing with our Gen AI, but in addition we’re able to assist real time those calls that end up with a human and they can be more productive,” Luchetti said, referring to the U.S. Personal Banking unit.

In October, Goldman Sachs informed employees of potential job cuts and a hiring slowdown through the end of the year, according to an internal memo seen by Reuters, as the Wall Street giant aims to use AI to enhance productivity.      

Calling the initiative “OneGS 3.0”, the memo said some of the priorities for its AI initiative are sales and client on-boarding process, as well as other critical areas such as lending processes, regulatory reporting, and vendor management.      

Bank of America plans to spend billions of dollars on technologies such as artificial intelligence to boost bankers’ productivity and bring in more revenue, its chief technology and information officer told Reuters last month.

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(Reporting by Tatiana Bautzer in New York and Prakhar Srivastava in Bengaluru; additional reporting by Arasu Kannagi Basil in Bengaluru; writing by Saeed Azhar; Editing by Lananh Nguyen and Nick Zieminski)

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