• Morgan Stanley forecasts Europe’s banks could cut about 10 percent of staff by 2030
• That implies more than 200000 jobs at 35 major lenders employing 2.12 million people
• Central services roles including risk and compliance seen as most exposed to automation
• Investor pressure is pushing banks to improve efficiency metrics like cost to income
• JPMorgan’s Conor Hillery warns AI speed must not erode banking fundamentals

Europe’s banks could eliminate more than 200,000 jobs by the end of the decade as lenders ramp up artificial intelligence and further reduce physical branch footprints, according to analysis by Morgan Stanley first reported by the Financial Times.

The report estimates that European banks could cut roughly 10 percent of their workforce by 2030.

The projection is based on a review of 35 major lenders employing about 2.12 million people, implying that around 212,000 roles could be removed over the next five years.

Morgan Stanley’s analysts said the impact is unlikely to be evenly distributed across banks or functions.

Instead, they expect the largest reductions in central services roles, including back office and middle office positions, as well as jobs in risk management and compliance.

These areas are seen as particularly susceptible to automation as AI tools improve at handling routine processes, data checks, and reporting work that has historically required large teams.

“Many banks have quoted efficiency gains coming from AI and further digitalisation to the tune of 30 per cent,” Morgan Stanley said, according to the Financial Times.

The drive to automate is being fueled by investor pressure to improve profitability. European lenders have struggled for years to match the returns delivered by many US banks, especially on return on equity.

With conventional cost cutting efforts losing momentum, AI is increasingly being framed as the next major lever for efficiency.

Morgan Stanley’s analysts pointed to cost to income ratios as a key metric investors will watch, arguing that AI offers a fresh opportunity to improve operating efficiency at a time when traditional cost reduction programs have “run out of steam”, according to the Financial Times report.

Still, the rush to deploy AI is prompting caution from senior figures inside the industry.

Conor Hillery, JPMorgan Chase’s co-chief executive for Europe, the Middle East, and Africa, warned that speed should not come at the expense of core banking skills.

“The one thing we have to be very careful about in this rush and excitement about AI in our world of banking is that people don’t lose an understanding of the basics and fundamentals,” Hillery was quoted by the Financial Times as saying.

He added that without balancing automation with human training, “Otherwise, we’re storing up a big problem for the future.”

The push is not confined to Europe. In the United States, Goldman Sachs has been implementing its OneGS 3.0 program, a multi year effort to rework operations using AI.

The bank has signaled a hiring slowdown and targeted job cuts, while indicating that some efficiency gains could be reinvested into higher value advisory work.