Morgan Stanley predicts AI will end over 200,000 European banking jobs by 2030

The Investment Bank Forecasts 10% Workforce Reduction as Lenders Target 30% Efficiency Gains in Back-Office and Compliance.

A new analysis by Morgan Stanley has delivered a stark warning for Europe's financial sector, predicting that the widespread adoption of Artificial Intelligence (AI) and continued digital transformation will lead to the elimination of approximately 212,000 banking jobs by 2030. This represents a 10% reduction in the total workforce across 35 major European banks.

The forecast, which underscores the intense cost pressure facing European lenders, suggests that AI is set to become the primary driver of major restructuring, particularly in high-cost operational areas.

Vulnerable roles

Morgan Stanley’s analysis, which reviewed banks employing a combined workforce of roughly 2.12 million people, found that job cuts will be disproportionately concentrated in so-called "central services" divisions. These roles are most vulnerable because they involve repetitive, data-intensive tasks that are ideal candidates for automation.

They include:

• Back-office operations

• Middle-office teams

• Risk management

• Compliance

The report notes that many banks are citing AI and digitalization as keys to achieving efficiency gains of up to 30%. This push is largely driven by investor pressure for European banks to reduce costs and improve their returns on equity, which typically lag behind their American counterparts.

AI offers banks a crucial opportunity to significantly improve their cost-to-income ratios, a key metric tracked by shareholders, especially in countries like France and Germany where these ratios remain high.

Industry leaders already signalling cuts

The projections align with proactive announcements from major European financial institutions already tying staff reductions to their AI adoption strategies.

Dutch lender ABN Amro announced plans in November to cut about a fifth of its staff (approximately 5,200 positions) by 2028, explicitly citing AI as a tool that enables more efficient operations in areas like customer service and anti-money laundering checks.

The CEO of the French bank Société Générale also publicly warned earlier this year that "nothing is sacred" in his campaign to reduce operational costs, hinting at deep structural changes driven by technology.

The analysis concludes that while AI will create new roles, the immediate impact will be significant disruption and displacement in non-customer-facing operations. With this, banks need to carefully balance automation with the preservation of critical human skills.