Bad news for the richest 1%: New study finds Exhaustive Reporting According to Citigroup, the financial industry will bear the brunt of AI-related disruption.
The 124-page report’s introduction asserts that AI will “bring about a fundamental shift in money.” Indeed, Citigroup says, AI will “create new opportunities for growth and innovation, and in many cases improve our overall quality of life.” But it also says that AI will cause “disruption” and create many “losers.”
Wall Street bankers may be at the top of the list: Citigroup, citing data from Accenture and the World Economic Forum, wrote that nearly seven in 10 banking functions (67%) are “likely” to be altered by AI or outsourced entirely, the highest percentage of any job the firm surveyed. Next are insurance, software, and capital markets (with utilities and natural resources, perhaps predictably, at the bottom of the list).
“Traditional AI adoption in financial services [is] “It is broad, shallow and trivial,” Shameek Kundu, chief strategy officer and head of financial services at AI observability platform TruEra, wrote in the report.
But the good news is that the adoption of AI more broadly can bring huge benefits to banks and financial institutions – and may not impact total employee numbers once the necessary AI-related management recruitment is taken into account.
After all, AI is not yet sophisticated enough to operate independently. As Citigroup puts it, in a “bot-driven world,” we will still struggle with compliance, data security, and basic ethics. “AI models have been known to hallucinate and create information where it doesn’t exist.” This is no small business risk.
In fact, AI could add $170 billion to global banking profits by 2028. Banks know this, even though they’re hesitant to adopt the technology: Nearly all financial institutions (93%) who responded to a recent Citi customer survey said that AI adoption will increase profitability over the next five years, primarily because it automates rote tasks currently performed by human workers, like data entry and tedious Excel files.
Despite the visible benefits that many other industries have seen from AI adoption for a long time, Citigroup predicts that the financial services industry will be slow to adopt AI and stumble compared to other industries. Citigroup attributes this to the “highly regulated nature” of the financial industry and the lack of globally agreed upon rules. “Bankers may think they are leading the way, but many users are adopting the technology faster than banks and large corporations,” Citigroup wrote. This phenomenon is what Citigroup calls “the crowd taking the crown.”
