A real earthquake. Artificial intelligence (AI) is already fundamentally changing the business world. If productivity increases, fears about the stability of employment will also increase. In October 2024, the company that controls the Chinese social network TikTok announced the dismissal of hundreds of employees responsible for managing content on its platforms. The task can now be accomplished more easily with new artificial intelligence software. It’s a choice that’s certainly not new in the world of Big Tech.
A study by the IMF (International Monetary Fund) reveals that these tools could disrupt up to 60 percent of existing jobs. However, according to another recent study by the World Economic Forum, approximately 23 percent of professions will change their face by 2027 due to the use of artificial intelligence. At a global level, the estimate is that 83 million jobs will be lost compared to 69 million created: a balance that is therefore expected to be negative. Among the professions on the rise, artificial intelligence experts stand out. Employees in the banking, finance, statistics and insurance sectors are most at risk of dismissal. A trend already seen in Italy, which does not surprise professionals.
The Bper case and the decrease in employment in Italian banks
The debate in our country started with Bper’s press release in October 2024. The fourth Italian bank, with an asset size exceeding 8 billion euros, announced in black and white in its 2024-2027 industrial plan that “the workforce will be reduced by 10 percent, thanks to the optimization and automation of processes.” AI/GenAI in both back office and support functions.’ There is no mention of layoffs in the text, but instead the voluntary departure of two thousand people. But the story quickly became national news.
The bank contacted by Today.it reduced its announcement. “AI is being used for jobs that humans cannot do. Previous years have seen branch closures, acquisitions of multiple banks and associated economies of scale; downsizing is part of these dynamics and has nothing to do with the use of AI,” says Bper. But the same sources also spoke to us specifically about “skilling”, that is, professional retraining for employees, confirming the company’s acceleration in the use of new technologies.
But leaving the specific case aside, the decline in employment in the sector has been going on for decades and coincides with digitalization. For those who remain, the only path is continuing professional development.
The profession, which many Italians continue to associate with the myth of the so-called permanent job, has been in crisis for more than 10 years. And the future doesn’t look good. Since 2012, the employment balance of five of the largest Italian banks has recorded a shortage of over 32 thousand workers. However, if you save on personnel, things change when it comes to technology.
Record investments in technology and increasing profits
The digitalization process of Italian credit institutions has been going on for more than 20 years. And today, there is evidence showing that AI software can perform processes ranging from customer assistance to investment management to credit risk assessment. Therefore, it is no coincidence that major Italian banks are betting millions of euros on this issue.
“Technological changes in the sector continue in the direction of the constant restriction of employment and the gradual abandonment of physical control of territories, which is now expressed in the slogan ‘productivity’. The use of artificial intelligence is increasing, especially in large groups. Insufficient consideration has been given to risks, including the protection and guarantee of financial inclusion,” says Secretary General Susy Esposito. Fisac Cgil, union.
And beyond the example of MPS, which was hit by a decade-long crisis, it is interesting to see that the banking institutions that invested the most in technology reduced headcount the most. A contraction that occurs while profits are often increasing. “In these two years, major banking players made a profit of around 13 billion. However, in 5 years, the number of branches decreased by 20 percent, from 25 thousand to 20 thousand, and the number of employees decreased by 20 percent in the same period,” Susy Esposito explains to Today.it: 6 percent , that is, just over 16 thousand, which corresponds to approximately 260 thousand workers in the sector.
And if Italy hasn’t seen any layoffs thanks to a temporary solidarity fund, the waters are certainly more troubled in the world of finance and so-called fintech.
Artificial intelligence is already replacing employees in fintech
The wake-up call was given by an interview in the New York Times with Deutsche Bank’s chief technology officer, Christoph Rabenseifner. The German manager said sincerely, “The aim is to replace young profiles with artificial intelligence.” The reference is to financial analysts and the possible decline in hiring in the industry. Even JP Morgan executive Jay Horine recently admitted: “Artificial intelligence will enable us to do tasks in ten seconds that would take ten hours. My hope is that it will allow our work to be more interesting.”
But in the meantime, layoffs have begun in the “fintech” sector, a rather vague definition that refers to all companies that use technology extensively in the banking, credit and finance world.
This is the case, for example, of the Swedish company Klarna. The app, which specializes in installment payments, has reduced its headcount from 5,000 to 3,800 after adopting a chatbot that could greatly reduce the time it takes to resolve tasks and issues. And this may be just the beginning of a real earthquake.
“We don’t know what effects AI will have in terms of disruption and job creation. But we are not the only ones doing this, even our colleagues are not aware of it. Only a select few, namely the five big tech companies, have this feature” Susy Esposito, secretary of Fisac Cgil , “they have the power to predict because they are the ones determining these changes,” he says. Absolutely, but also because of what we have experienced, the balance is negative at the moment.” Also, to manage the digital transformations that have been ongoing since 2019, Italy has a control room dedicated to workers in the sector, consisting of social partners and the Italian banking association Abi.
Other union sources interviewed by Today.it underline that Italian banks are still quite wealthy in the region due to the advanced age of their customers. And how unlikely it is that the emergence of artificial intelligence will create a tsunami of jobs in the short term.
But someone is already guessing the time. This is the case of Intesa San Paolo, which founded “Isybank” in 2023, a digital bank with no physical branches in the region. In short, as in other tertiary sectors, the path now looks clear. Of course, the loss of employment can be partially offset by the creation of occupations with higher added value, as in previous industrial revolutions. Or it may lead to reduced working hours. What is certain is that the transition will soon require political responses. Our future will depend on the effectiveness of these responses.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
