Globally, banks and financial institutions are rethinking workforce requirements as AI and automation become mainstream. Standard Chartered recently announced plans to reduce thousands of jobs over the next few years while accelerating AI adoption. Global lenders such as Citi, UBS, HSBC and Morgan Stanley have also undertaken restructuring exercises, with technology increasingly replacing repetitive back-office and operational work. Even in India, technology-led efficiencies are enabling banks to redeploy employees from operational functions to customer-facing roles.
Over the last few decades, India’s finance sector produced millions of jobs for the middle class. It gave big hope to young graduates to sell products, market them, manage transactions, enter data and run their households. Advanced technologies, specifically automation and artificial intelligence, are quietly breaking that career ladder, not because finance is changing but because technology is replacing people. Banks are onboarding twice as many customers with the same number of employees by automating processes, and mobile apps are selling more than a branch could ever have done.
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Hence, the big question is: what will the future look like? If a bank officer at the counter doesn't sell you fixed deposits or mutual funds, if an insurance agent doesn't call you 20 times a week, then who will do that? Will everything be available on apps? Will AI take away the mundane jobs finance professionals have done for years and spent hours acquiring customers? The question is: in the world of finance, what kinds of jobs will finance companies need, and what kinds of skills should employers embrace?
This week, my colleague filed a detailed report about how private banks have shed 7,700 jobs so far in FY26. Much of the reduction reflects technology-led productivity gains, automation of repetitive operational functions and changing workforce requirements as banks become increasingly digital.
A banker once told me that his team of 10 employees used to onboard around 10,000 customers daily. Now, with automation, the same team is onboarding more than 25,000 customers. Similarly, customer onboarding for banks, brokers, mutual funds and insurance companies has shifted to mobile apps. Hence, the idea of reducing the number of employees is gaining traction.
This is not just an Indian phenomenon. Globally, banks and financial institutions are rethinking workforce requirements as AI and automation become mainstream. Standard Chartered recently announced plans to reduce thousands of jobs over the next few years while accelerating AI adoption. Global lenders such as Citi, UBS, HSBC and Morgan Stanley have also undertaken restructuring exercises, with technology increasingly replacing repetitive back-office and operational work. Even in India, technology-led efficiencies are enabling banks to redeploy employees from operational functions to customer-facing roles. The message is clear: the future of finance is likely to be driven as much by productivity per employee as by the number of employees on the payroll.
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Job impact on the economy
But it's not just finance: job losses are occurring across many sectors. India’s darling IT sector has fired thousands of employees as AI increasingly becomes one of the drivers of workforce rationalisation, alongside slower global technology spending and weaker demand. As of now, the first casualties of automation or AI are specifically entry-level jobs. When you look at the finance sector as a whole, apart from what I mentioned above about banks and insurance, functions such as reconciliation, clearing invoices and processing payments, preparing management information system (MIS) reports, tax calculations and computations, monthly statements and audits, all these jobs have not changed for years, and many of them are among the strongest candidates for automation over the coming years.
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What we will see is an impact that could be immeasurable once job losses start happening. It's not just about an employee losing a job, but about the loss of their contribution to the consumption economy. If white-collar job creation slows materially over the coming years, the ripple effect could extend well beyond employment numbers. Salaried professionals drive consumption through housing, automobiles, travel, education and discretionary spending. A prolonged slowdown in hiring could eventually weaken retail credit demand and, over time, increase stress in certain loan portfolios. In fact, young professionals may become more cautious about taking long-tenure loans if employment uncertainty becomes a persistent concern.
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India, automation and the job story
In the world of automation, India has an extremely unique challenge. The country produces millions of graduates, many of them the first graduates in their family; the majority live in smaller towns where there is little exposure. Unemployment among young graduates remains significantly higher than the national average, highlighting the challenge of creating quality jobs for educated youth. In such cases, we should and must look at the cost of technology versus the cost of the human. The economics will differ across businesses. While AI can generate substantial savings at scale, its costs include subscriptions, cloud infrastructure, computing power, implementation and continuous maintenance. Perhaps the cost of technology in dollars, with subscription and annual maintenance, could be much higher than the cost of human labour in certain functions.
One report says employers who fired people due to AI have started rehiring them because of quality issues that only humans can solve. Auto manufacturer Ford has reportedly rehired engineers after AI failed to match quality checks. The conversation, therefore, should not revolve only around layoffs. It should also focus on reskilling. Financial institutions cannot simply automate roles and expect employees to adapt on their own. Banks, insurers, mutual funds and NBFCs will have to invest continuously in retraining their workforce for emerging roles in AI governance, cybersecurity, data analytics, digital product management, cloud technologies, compliance and customer advisory. The responsibility also lies with universities and professional institutions to redesign curricula around technology-enabled finance. The winners in the AI era will not necessarily be institutions with the fewest employees, but those with the most adaptable workforce.
While AI is disruptive and we all see it as a big innovation, my question is: is AI the last technology? Won’t there be any technology after AI? Let's not forget, from IoT, big data, analytics, blockchain and machine learning to the metaverse and cloud, we have backed every technology. What remained with us and what vanished, we all know. History suggests that every technological wave changes the nature of work rather than ending work altogether. AI may well prove to be the most transformative technology yet, but it will also create opportunities that we cannot fully foresee today. The challenge for India is to ensure that its workforce is prepared for those opportunities. So AI is good, but let's take a pause.
Please share your feedback, suggestions if any. You can reach me on amol.dethe@timesinternet.in and follow me on LinkedIn at ETBFSI Digest.
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