Artificial Intelligence (AI) has the potential to significantly transform the job market, particularly within the finance sector, as indicated by a recent report from Citi. The report highlights that over half of all jobs in the industry are susceptible to disruption by AI. Specifically, 54% of roles in the banking sector are at high risk of automation, with an additional 12% capable of being enhanced by AI. This has far-reaching implications for the future of work in finance, with the balance of power in the industry likely to shift as AI-powered tools increase price competition.
The report suggests that digitally native, cloud-based firms such as FinTechs and BigTechs are expected to adopt AI at a faster pace, potentially leaving traditional incumbent banks at risk of falling behind. Many established banks, constrained by technological and cultural factors, may struggle to keep pace with the rapid adoption of AI, potentially resulting in a loss of market share.
Furthermore, the transition to a “bot-powered world” raises complex concerns related to compliance, security, regulation, and ethics. Citi has warned that if left unchecked, AI chatbots could disseminate false information and operate autonomously, posing financial and reputational risks for businesses.
The impact of AI extends beyond the finance sector, with the report identifying high potential for automation in industries such as insurance (46%), capital markets (40%), and energy (43%).
This recent report from Citi aligns with earlier findings from the International Monetary Fund (IMF), which suggested that advanced economies would bear the brunt of job disruption caused by AI. While approximately 40% of global employment is susceptible to AI, the technology is expected to impact around 60% of jobs in advanced economies, particularly those in high-skilled roles. This raises the risk of reduced labor demand, lower wages, and potential job displacement as AI applications increasingly take over key tasks.
Additionally, AI and automation are reshaping the finance industry, with a particular focus on assisting Chief Financial Officers (CFOs) in navigating a shortage of accountants. According to Jarrett Bruhn, managing director and head of data and AI in global transaction services at Bank of America, these technologies are revolutionizing every aspect of treasury, akin to the “Industrial Revolution 4.0”. Consequently, the role of treasurers in finding operational and cost efficiencies is undergoing fundamental change.
In conclusion, the emergence of AI has the potential to redefine the global job market, especially within the finance industry. While the possibilities for automation and augmentation present exciting opportunities for innovation and efficiency, it is essential to carefully consider the ethical, regulatory, and societal implications of AI adoption. As the finance sector embraces AI, it is crucial for organizations to navigate these changes thoughtfully and responsibly in order to ensure a sustainable and inclusive future of work.