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Artificial Intelligence (AI) is on track to revolutionize the finance industry, potentially adding tens of billions of dollars in profit while automating up to half of the jobs in the sector, according to research from Citi.
The report indicates that 54% of jobs in banking have a high potential for automation, which is more than any other industry. Additionally, 12% of banking jobs have a high potential for “augmentation.”
Currently, the use of GenAI in finance is largely at the proof-of-concept stage. However, Citi notes, “we’re in a period of rapid and unprecedented transition.”
The report explains: “Historical technological transformations have eliminated long-established jobs, which were then replaced by new roles. Many firms disappeared during these transitions. AI will likely repeat this cycle, possibly at a faster pace.”
While AI’s emergence may negatively impact employment, it is expected to benefit the financial sector’s bottom line significantly. Global banking industry profits could reach $2 trillion by 2028, representing a 9% increase (or $170 billion) over the next five years.
Citi suggests that digitally native, cloud-based firms such as fintechs and Big Tech will likely adopt AI more quickly, with agile incumbent banks following closely. However, many traditional banks burdened by outdated technology and entrenched cultures may lag in AI adoption, risking a loss of market share.
To avoid falling behind, Citi is empowering 40,000 coders to experiment with various AI technologies. Similarly, rival JPMorgan has announced plans to provide AI training to all new employees, with CEO Jamie Dimon comparing AI’s arrival to the invention of the printing press and the steam engine.
The Citi report also highlights that, while AI could lead to significant productivity gains, the transition to a “bot-powered” world raises important issues around data security, regulation, compliance, ethics, and competition that must be addressed.
Furthermore, the report cautions: “AI models are known to hallucinate and generate information that does not exist. This poses a risk of AI chatbots going fully autonomous, potentially harming a business financially or damaging its reputation.”
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