European banks are undergoing major transformation driven by artificial intelligence (AI) and digitalization. Analysts predict that by 2030, automation could threaten up to 200,000 jobs in Europe’s banking sector. Unlike previous waves, this shift is not triggered by economic crisis but by technological progress.
Banks are reducing staff numbers, especially in central departments like operations, document management, and transaction control. Dutch bank ABN AMRO, for instance, plans to cut about 5,200 jobs by 2028. Large European banks are also reorganizing their workforces and closing physical branches, with an 8% reduction of branches in Germany alone during 2024, and up to a third over the past few years in some countries.
AI effectively automates repetitive tasks such as processing applications, data verification, transaction monitoring, and customer service. However, excessive automation can reduce service quality, as seen in Swedish fintech Klarna, which has had to rehire staff to handle complex customer inquiries.
Branch closures and job reductions impact not only employees but also small businesses, which face reduced access to financing due to less personal interaction with bankers. Transparency and oversight are required for AI systems to prevent abuse and meet strict regulatory standards in the banking sector.
Many banks rely on technology providers for AI solutions, creating systemic risks if these suppliers experience outages. Nevertheless, AI offers banks opportunities to scale, cut costs, and increase efficiency. The European banking sector is likely to see further reductions in office roles and a shift in staff functions, with some workers reskilling for roles in fintech.
The pace of automation and staff education remains a challenge. Banks must balance innovation with robust controls and staff training. This transformation is not the end, but the beginning of a new chapter for financial services in Europe.
