In November 2022, OpenAI’s ChatGPT, an artificial intelligence (AI) chatbot, gained one million users within five days of its launch, sparking a rush in the adoption of AI and the digital transformation of workplaces around the world. This rapid growth has led to concerns about the impact AI will have on jobs. According to a new report by Citigroup, the banking industry is expected to be the hardest-hit by AI, with 54% of roles at risk of displacement. Moreover, another 12% of banking jobs could potentially be augmented by AI.
The report highlights the transformative potential of AI, stating, “GPTs have the potential to transform entire economies, changing the way we live and work. They create new opportunities for growth and innovation, often improving our overall quality of life. They also destroy existing ways of doing things. And as such they also create losers. Especially in the short term.”
The banking industry is not the only sector at risk. Insurance, energy, and capital markets are also vulnerable, with job displacement estimated at 48%, 43%, and 40% respectively. Citi predicts that automation will play a significant role in these sectors and will drive changes in market share, employment, and client experience.
David Griffiths, the Chief Technology Officer at Citi, emphasizes the remarkable impact of AI, stating, “The pace of adoption and impact of Gen AI across industries has been astounding as it becomes clear that it has the potential to revolutionize the banking industry and improve profitability.”
The adoption of AI in the banking sector is already underway. Citi plans to deploy generative AI technology to its 40,000 developers, following the growing trend of integrating financial services and technology. The bank has successfully utilized automation to analyze complex capital regulations, enabling it to examine intricate rules thoroughly. This use of AI has allowed Citi’s risk management and compliance team to evaluate the potential consequences of proposed regulatory changes.
CEO Jane Fraser has outlined Citi’s strategic priorities for AI adoption, with a focus on practical implementation. The bank aims to leverage AI to provide personalized investment recommendations for wealth management clients and enhance cybersecurity offerings through the integration of AI solutions.
However, AI adoption in banking requires robust governance. Compliance with regulations must include human oversight, ethical AI principles, data quality controls, model risk management, and audit trails to ensure transparency and accountability in AI-driven decisions. AI systems can monitor transactions, communications, and trading activities in real-time to detect potential violations and mitigate risks.
While the deployment of AI may lead to job losses, it also has the potential to create new roles in developing, implementing, and managing AI systems. Banks may need to hire specialists with AI and data science skills while reskilling existing employees to work alongside AI technologies. Adapting to the changing job landscape and staying updated on the latest AI trends and tools is crucial for professionals in the banking industry to future-proof their careers.
As AI continues to evolve and become more pervasive in the industry, banking professionals should strive for lifelong learning, attend industry events, and actively engage with AI communities to gain industry knowledge and increase their value within the sector.
The impact of AI on the banking industry and other sectors cannot be understated. The rise of AI presents both challenges and opportunities, and it is essential for businesses and professionals to navigate this technological transformation effectively.
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