The world’s largest banking institution, HSBC, is currently assessing its plan to eliminate up to 20,000 positions because the bank will expand its operations to artificial intelligence. The potential cuts could affect roughly one in ten of the bank’s 210,000 employees worldwide, especially the personnel who work in middle- and back-office positions.
According to Bloomberg, the bank intends to reduce its workforce because it increasingly depends on artificial intelligence for executing standard operational tasks which involve processing large amounts of data throughout its compliance and processing and support departments.
The company has already improved its operational efficiency through process optimisation in certain areas and complete departure from specific markets, which demonstrates its commitment to using technology for improved operational performance.
The implementation of artificial intelligence technology will decrease physical tasks by transforming employee requirements.
The discussions are in their initial stages, and no final decisions have been made. If approved, these changes are set to be implemented in three to five years. Although some jobs may be affected by AI, others may be made redundant because of divestments and consolidations.
In the global banking sector, analysts estimate that up to 200,000 jobs may be lost in the coming years as the use of innovation becomes widespread.
Jobs that are customer-facing and advisory are likely to be less impacted, but operational and support staff may be at higher risk of job loss due to the changes. Notably, HSBC has not publicly commented on the reported plans.