Major US banks are beginning to detail how the coronavirus pandemic is hurting their businesses, offering more insight into the outbreak’s impact on the banking industry.
Marianne Lake, who heads JPMorgan Chase’s consumer and community banking division — where there is intense use of big data and AI- at a recent Goldman Sachs financial services event told those present the bank has more than doubled its productivity rate with AI, increasing it from 3 per cent to 6. Productivity among operations specialists could increase by 40-50 per cent, she said. Increased output, she said, should help mitigate the overall blow to jobs even as some change or are cut.
AI is increasingly perceived within the industry as one of the most significant changes since the birth of the internet. The flood of investment and stock gains has rubbed up against shortages of memory chips, closer scrutiny from regulators and increasing concern about what automation will mean for workers.
Wells Fargo CEO Charlie Scharf said the bank hasn’t been slashing staff, but that AI is enabling teams to complete more work. “There will be a variety, other places out there that we are going to be able to look at and learn how we can do more with fewer people,” he said. “It’s not going to be all car, no person, but it does open up the world to doing things in very different ways.”
Bill Demchak, the PNC Financial Services Group chief executive, said the bank’s workforce is about where it was a decade ago, even though the company has tripled in size over that time. He attributed most of that change to automation and changes in branch operations. “You know, the big buzz right now is that it’s going to continue because AI is going to be driving it. “But we’ve been on an automation journey for a long time, and AI is more likely to be accelerating,” he said. “It will be a strong accelerant in our tech headcount, for sure.”
Gonzalo Luchetti, Citigroup’s incoming CFO, said the bank has experienced a 9 per cent increase in coding output. AI tools are also helping improve customer service, he added. “Not only can we drive the self-service ratio up, as you’re seeing and doing with our Gen AI, in addition to that, go help real-time those calls that get out to a human and be more effective,” he said, referencing the US Personal Banking business.
Some companies are already preparing for potential job cuts associated with new efficiency targets. In October, Goldman Sachs said in an internal memo viewed by Reuters that layoffs and reduced hiring could persist through year-end for employees. The memo, titled “OneGS 3.0,” said the bank is currently concentrating its AI work on sales and client onboarding as well as lending, regulatory reporting, and vendor management.
Bank of America is also ready to make significant investments in new technologies such as AI to help bankers produce more and generate revenue, its chief technology and information officer told Reuters last month.
