ABN Amro plans to cut nearly a quarter of its staff by simplifying processes, with IT, including artificial intelligence (AI), central to its plan.
The removal of legacy systems, deployment of embedded AI and the use of application programming interfaces (APIs) will support a strategy to optimise and digitise processes.
The bank, which currently has just over 22,000 staff, said 5,200 full-time roles will be removed by 2028.
It has so far reduced its workforce by 1,000 this year, and expects the remainder of the cuts “to take place through natural attrition”.
“Operations are being simplified, driving efficiencies by reducing the number of legal entities, optimising and digitalising end-to-end processes. Technology is central, with legacy systems being phased out, API use expanded, and AI embedded,” the bank said.
Acknowledging that changes to the cost base, especially reducing full-time employees, caused uncertainty for staff, ABN Amro CEO Marguerite Bérard said: “We are fully committed to supporting everyone affected with a robust social plan, offering financial support and assistance in finding new opportunities.”
Traditional banks face increased competition from digital challengers, which have lower cost bases with far fewer staff.
For example, UK digital bank Revolut last week announced its latest valuation of £56m. The bank, which began life as a fintech providing foreign currency services, now offers bank accounts, credit cards, loans and cryptocurrency trading.
It has 65 million customers worldwide and is planning to reach 100 million by mid-2027. It has about 10,000 staff and already operates in 48 countries. In comparison, ABN Amro has 22,000 staff with about five million customers.
Digital banks and other tech-based finance firms have AI embedded through their businesses, which ABM Amro committed to emulate in its latest announcement.
This is core to the cost-cutting plans of finance firms across the sector.
Last week, fintech Klarna, which offers buy now, pay later (BNPL) services to consumers, said it has reduced its human workforce from 5,500 to less than 3,000 in the past few years, while doubling its revenue.
The use of AI has increased as staff have left the company through natural attrition, but rather than being replaced by humans, AI has taken over and is now doing the work of 853 full-time staff.
Recent figures from Bloomberg Intelligence put the number of jobs set to be replaced by AI at hundreds of thousands, with CIOs questioned by the organisation expecting 3% of their workforce on average to be cut. About a quarter of respondents expect the workforce to be cut by between 5% and 10% as AI takes over roles, with the back and middle offices likely to be most affected.
But it’s not just back and middle office jobs in banking that will disappear. People working in branches also face uncertain futures as big banks shutter high street branches.
Ron Warmington, former global head of banking investigations at Citibank, aired his concerns about the direction banks are taking. “The trouble with banking these days is that there are very few bankers. It was once a highly respected profession, but now banks are just sales platforms,” he said.
