Europe's banking industry is poised for a significant efficiency overhaul. A recent Morgan Stanley analysis indicates that over 200,000 jobs across European banks could be eliminated by 2030, as financial institutions increasingly adopt artificial intelligence and reduce their physical branch networks. This figure represents approximately 10% of the workforce at 35 major banks.

The most substantial reductions are expected in back-office functions, risk management, and compliance—areas where AI algorithms are seen as capable of processing data far more quickly and accurately than human employees. Banks are reportedly enthusiastic about potential efficiency improvements of up to 30%, as highlighted in the Morgan Stanley report.

This trend toward workforce reduction is not limited to Europe. Goldman Sachs informed its U.S. staff in October of impending job cuts and a hiring freeze extending through 2025, part of an AI initiative called "OneGS 3.0" aimed at streamlining processes from client onboarding to regulatory reporting.

Several institutions are already implementing these changes. Dutch bank ABN Amro intends to reduce its staff by one-fifth before 2028, and the CEO of Société Générale has emphasized that "nothing is sacred" in this transformation.

Nevertheless, some banking executives in Europe are advocating for a measured approach. A JPMorgan Chase official noted that if junior bankers miss out on learning fundamental skills, it could pose long-term risks for the industry.