Bank Executives Reassessing Hiring Amid AI Growth
The race to deploy artificial intelligence at Canada’s biggest banks is prompting senior executives to rethink staff roles, stem hiring and roll out training to entice employees to use the new technology, as concerns mount over the impact on jobs across lenders globally.
Canada’s banks have not disclosed significant job cuts caused by AI adoption. But senior bankers say the technology has reduced the need to hire new staff as AI takes on more of the “toil” work while employees pivot to focus on higher-value work.
“We may not need to hire as many people, but we have lots more work coming down the pipe that we need to do,” Canadian Imperial Bank of Commerce CM-T chief technology and information officer Richard Jardim said in an interview.
“We keep iterating on adding the new skills and adjusting what some of the roles do, but we don’t make those roles go away yet, because we still have lots of work we need to get through.”
The financial industry has been faster to adopt AI than most sectors in Canada. More than 30 per cent of finance and insurance firms are using AI, compared with just 1.5 per cent of businesses in accommodation and food services. Banks are setting the tone for how the rapidly evolving technology will transform the work force.
Once an experimental concept, AI has become a major vehicle to cut costs and improve efficiency at banks. The country’s lenders are already making inroads on investor expectations that AI can go a step further to drive revenue and bolster profits.
Some major global banks have lauded the job cuts afforded by AI.
In mid-July, JPMorgan Chase, the largest bank in the U.S., reported record profit for the second quarter and chief executive officer Jamie Dimon said there are areas where the lender has trimmed jobs by 30 to 40 per cent owing to AI. He added that most employees found other roles at the company.
In May, Britain’s Standard Chartered said it plans to eliminate 15 per cent of its corporate function roles – or more than 7,000 jobs – over four years as it replaces what chief executive officer Bill Winters called “lower-value human capital” with technology and AI. Shortly after, Mr. Winters apologized for the upset his comments caused to staff.
Canadian banks have been cutting costs as part of widespread efforts to boost profitability. But the current impact of AI on jobs in this country is thought to be more mild.
The Bank of Canada said in May there is no evidence that AI has led to widespread job losses. In a recent survey of senior experts in risk management in the financial sector, many said that AI will be a tool to inform decision-making while humans remain in charge, reinforcing that AI will transform jobs rather than eliminate them.
The clearest signs of AI’s potential to displace certain jobs in the financial sector are in hiring practices. As AI automates processes and saves time for employees, banks are hiring fewer people even as their business grows.
In CIBC’s technology and data unit, the lender has needed to hire fewer staff even as the demand rises for the team’s support with bringing on new clients, rolling out updated products and automating processes across the company, according to Mr. Jardim. And as AI changes the need for certain roles, the bank is adjusting the scope of those jobs.
“We have people in technology, for example, that are business analysts or project managers. Some of that can be automated now, especially project control work,” Mr. Jardim said.
“Those people that understand the products, the environment at the bank and the technology, you can move them quite easily into the business if you want to, where you need product people, because you can’t AI that away. There are different roles we see changing, where we either move people around, or we have them adjust the type of work they do.”
Bank of America BAC-N, which has corporate and commercial clients in Canada, uses AI to power Erica, its virtual assistant for consumers.
The platform allows customers to find more complex information and process their own transactions without having to call the bank’s contact centre. Erica processed more than 200 million customer interactions in the second quarter ended June 30.
As the lender’s client volumes have risen, Bank of America has not had to increase staffing while Erica takes on more customer interactions, head of consumer technology Tom Ellis said in an interview.
“Our clients can find what they need in the app,” he said. “They don’t have to call the contact centre.”
Senior bankers expect to remove “toil” work, referring to operational and procedural tasks that could be automated or completed by AI. Royal Bank of Canada RY-T is using the technology to produce internal reports and credit decisions on loans – work that required the time and effort of multiple people, head of artificial intelligence Bruce Ross said in an interview.
In June, RBC chief executive officer Dave McKay said he starts his mornings with a briefing from AI tool, reducing the amount of work his team needs to do, so they can instead focus on providing context and insight.
In RBC’s capital markets unit, junior bankers – a role notorious for excessive hours and grinding tasks – are spending less time building pitch decks and research reports. AI is being used to synthesize conversations in meetings and produce PowerPoint presentations.
Mr. Ross said junior bankers are focusing more on analysis and less on production.
“It frees your mind up to do other things and really think about what you’re going to put in front of the client, and then be able to be in front of more clients,” he said.
As AI adoption leads to job descriptions being revised and some positions eliminated, banks are offering training and resources to help employees learn how to use the technology and prepare for new types of roles.
About 50,000 staff – nearly all of CIBC’s employee base – have signed up to use its internal AI chatbot, CAI. To access the platform, staff must complete mandatory training, including writing prompts and understanding associated risks with data. About 20,000 people use the platform daily, with 36,000 active users a month on average.
With more of its employees adopting AI tools, CIBC estimates that its staff saved about 1.2 million hours in the first quarter ended Jan. 31.
“Apart from it freeing up everyday capacity across multiple employee segments it actually allows them to learn about AI and not be frightened of these tools and actually up their skills,” Mr. Jardim said.
RBC has rolled out RBC Assist and Aiden, its internal AI tools, to 65,000 of its more than 97,000 employees.
RBC offers educational sessions and has designated AI advocates, who are employees across the banks’ businesses tasked with encouraging and educating their peers on how to use the technology.
“It’s the responsibility of the organization, but it’s also the responsibility of the individual to experiment,” Mr. Ross said. “Within each part of the organization, it’s our responsibility to provide those opportunities.”
This article was first reported by The Globe and Mail
