US bank executives say AI will boost productivity, cut jobs
AI boosts productivity at JPMorgan, Wells Fargo, PNC and Citigroup
Banks are investing heavily in artificial intelligence for efficiency and revenue growth
Goldman Sachs targets AI for sales, customer engagement and regulatory reporting
Artificial Intelligence could lead to layoffs despite increased productivity
Written by: Tatiana Bautzer and Prakhar Srivastava
NEW YORK, Dec 9 (Reuters) – U.S. banks including JPMorgan Chase and Wells Fargo said artificial intelligence would increase productivity at their companies and likely cause job losses.
JPMorgan Chase’s consumer and community banking chief, Marianne Lake, told a Goldman Sachs financial services conference that the bank doubled efficiency with AI to 6% from the previous 3%.
Lake said operations specialists’ productivity is expected to increase by 40% to 50%. He said higher productivity means less business impact on a net basis.
Artificial intelligence represents the biggest technological change in the world economy since the rise of the internet.
Along with trillions of dollars in investment and dizzying stock market gains, a shortage of memory chips has brought growing anxiety about regulatory scrutiny and layoffs.
Wells Fargo CEO Charlie Scharf said the bank hasn’t reduced the number of people, but “we’re getting a lot more done” thanks to artificial intelligence.
“There are other places out there that we can look at and figure out how we can achieve more with fewer people,” he said.
“It won’t completely replace humans, but it creates the opportunity to do significantly different things.”
PNC Financial CEO Bill Demchak said that through the automation and branch optimization process, the bank’s headcount is the same as it was 10 years ago, when the bank was one-third the size.
“You know, the big talk right now is that this will continue because AI will drive it. But we’ve been on the automation journey for years, and AI could very well be an accelerator,” he said.
“Technology will definitely accelerate our headcount.”
Gonzalo Luchetti, Citigroup’s new CFO, said the bank saw a 9% productivity increase on the coding front.
“Not only are we increasing the rate of self-service that we’re already seeing and doing with our Generation AI, but we’re also able to assist calls that result in a human being in real time and be more productive,” Luchetti said, referring to the US Personal Banking unit. Goldman Sachs informed employees in October about possible layoffs and a slowdown in hiring toward the end of the year, according to an internal memo seen by Reuters; because the Wall Street giant aims to use artificial intelligence to increase productivity.
Dubbing the initiative “OneGS 3.0,” the statement noted that some of the AI initiative’s priorities include sales and customer onboarding processes, as well as other critical areas such as lending processes, regulatory reporting and supplier management. Bank of America plans to spend billions of dollars on technologies such as artificial intelligence to boost bankers’ productivity and generate more revenue, its chief technology and information officer told Reuters last month. (Reporting by Tatiana Bautzer in New York and Prakhar Srivastava in Bengaluru; Additional reporting by Arasu Kannagi Basil in Bengaluru; Writing by Saeed Azhar; Editing by Lananh Nguyen and Nick Zieminski)
