No blank cheque for AI banking

“THERE will come a point when no job is needed.”

One can beg to differ, but this is what tech billionaire Elon Musk told the then United Kingdom Prime Minister Rishi Sunak back in 2023 during a widely-reported interview.

Much of that discussion was centered on the implications and risks of deploying artificial intelligence or AI.

While Musk’s prediction doesn’t seem like it will come true anytime soon, stark reality has hit the banking world, and very near to home too.

In February, the largest banking group in South-East Asia, Singapore’s DBS Group Holdings Ltd, said it would be slashing some 4,000 jobs even as AI increasingly takes on human roles.

More recently, Morgan Stanley announced that it would cut 2,000 jobs, or about 2% to 3% of its workforce, as AI becomes more of a game-changer than a mere enabler.

More of such cuts are expected globally over the next few years as many roles continue to be automated by AI. In fact, according to data by Bloomberg Intelligence, up to 200,000 global banking jobs are expected to disappear in as quickly as 3 years, as a result of AI.

To be sure, it is not only the banking and finance industry that will be impacted.

However, according to a Citigroup report, this particular industry will be the worst-hit by the deployment of AI, with more than 50% of roles at risk of being displaced by AI technology in the near future.

Given these predictions, has a career in banking, long thought to be relatively stable, become like any other career now, susceptible to the changes in environment?

The short answer is yes. However, there are several layers to this. Most of the roles that have been cut or are expected to be eliminated in the future are highly automatable.

Linda Teo, country manager of ManpowerGroup Singapore, was quoted by Channel News Asia as saying that AI and automation have advanced significantly in executing repetitive and predictable tasks.

Jobs like customer representatives and sales personnel can be replaced by AI, removing the need for human workers.

However, there are several pitfalls to this. At Malaysian lenders, the idea of AI becoming increasingly important is not being taken lightly.

AI is the future

Malayan Banking Bhd (Maybank), the country’s largest lender by asset size, says AI is set to be embedded in every function of the bank, to automate current processes, sharpen its computational algorithms and to support multiple communication channels.

“In a nutshell, AI enables us to automate processes and augment human decisions to become a safer, more efficient and more data-driven organisation,” president and group CEO Datuk Khairussaleh Ramli tells StarBiz 7.

However, he believes “very few” jobs, if any, will be completely replaced by AI.

He says it is more realistic to expect AI to support existing jobs and increase productivity.

As an example, software developers will be able to develop codes and test new capabilities with generative AI, while relationship managers will be able to create tailored materials for each customer and offer their services to individuals with lower wealth under management, he says.

Likewise, he says, legal and compliance officials will be able to quickly draft and critique documents and contracts to ensure a fast turnaround while call centre operators will be able to serve more customers every day by focusing on complex queries, leaving simple requests to AI.

CIMB Group Holdings Bhd group CEO Novan Amirudin says the lender is “actively” driving AI transformation.

“AI will play a pivotal role in CIMB’s Forward30 strategic plan and in shaping the bank’s future.

“By strategically deploying AI, we aim to drive revenue growth, reduce costs and elevate the quality of our customer journey.”

Novan says the bank views AI development across four stages: AI-driven personal productivity tools, AI companions, agentic AI and AI-led banking.

“We are now implementing stages one and two.”

RHB Bank Bhd group managing director and group CEO Datuk Mohd Rashid Mohamad says AI is fundamental to RHB’s long-term vision.

“We are following a three-phase strategy over the next three years. In the first phase, we are deploying Large Language Models on internal data to support our service team with more personalised and efficient service delivery.

“The second phase involves expanding AI models to improve decision-making and customer engagement. In the third phase, we will enable advanced reasoning capabilities, allowing AI to support more sophisticated decision-making processes and corresponding automation of action execution.”

Like his peers, Hong Leong Bank Bhd (HLB) group managing director and CEO Kevin Lam also says AI is integral to the bank’s future vision.

“We are building a robust AI ecosystem to drive personalised financial solutions and operational excellence.

“Just six months ago, we showcased the tangible impact of AI at HLB, introducing our AI colleagues: Sophia, Amelia and Helen. These AI agents, now integral to our collection, telemarketing, and customer service operations, have delivered a phenomenal 15-fold productivity increase, proving the transformative power of AI in banking,” Lam says.

In addition to deploying AI in key operational areas, Lam says that employees are empowered to come up with innovative ideas.

AMMB Holdings Bhd (AmBank) group chief fintech and technology officer Wong Eng Teng says the bank is just starting to use AI and data strategies.

“The main goal is to improve business performance in areas like fraud detection, credit risk assessments, automating tasks, and helping relationship managers with data insights to better serve clients.”

Job cuts imminent?

While the benefits of AI cannot be disputed and banks all over the world are quite clearly moving towards that direction, the next obvious question is where does this leave the banking workforce? There is no simple answer. 

With the predictions that have been laid out, one cannot help but be pessimistic.

However, local bank CEOs generally say that there are no plans for job cuts, at least for now.

Khairussaleh says the bank plans to maintain its growth momentum in the next few years. “Given this perspective, Maybank does not expect to cut jobs, rather to employ current employees more effectively to generate and support existing and new business.”

Novan says the impact and opportunities of AI on jobs must be viewed holistically.

“AI will make our back office more efficient and allow us to offer more personalised solutions in the front office. As a result, this will lead to a reallocation in our workforce from the back to the front office.”

He says to help employees navigate changes, CIMB is actively investing in upskilling and reskilling programmes, especially in digital, data, and GenAI.

According to him, to-date, it has trained over 1,400 employees in digital & data programmes. 

“Our hiring strategy will also be adjusted based on the evolving needs of our workforce,” he adds.

When asked about this, Mohd Rashid gives a resounding no. “We don’t plan to cut jobs due to AI adoption. We see AI as a tool to enhance our workforce performance, not to replace it.

“Unlike previous waves of automation that focused on clerical tasks, AI today can enhance all job functions by supporting more advanced decision-making and operational processes,” he says.

Mohd Rashid adds that even if AI replaces some roles, it does not necessarily mean job cuts. “RHB is proactively adapting to the evolving landscape of AI by creating specialised roles like AI project managers and AI-focused compliance officers.”

HLB’s Lam says AI will not reduce the bank’s headcount or lay off employees.

“AI assistants will support our relationship managers, enabling them to improve account load ratios and deepen client relationships. AI will transform their roles and allow them to focus on high-value activities.”

Wong says AmBank continues to invest in upgrading human capital and future-proofing careers through upskilling programmes, role evolution, and creating new AI positions.

A major strength of AI is its ability to reduce an organisation’s operating costs.

According to Novan, CIMB’s preliminary estimates indicate that AI will boost profits by at least 10%.

Khairussaleh says AI will help Maybank save costs in the mid and long run.

“More importantly, organisations will need to invest to secure AI capabilities first,” he adds.

AI generates cost efficiencies by automating manual processes, reducing errors and improving operational efficiency, according to Mohd Rashid.

“However, our focus extends beyond cost-cutting. We view AI as a means of creating sustainable value by enhancing customer experiences, improving risk management and empowering our workforce.”

He notes that one of the primary use cases for generative AI is in customer service and support – an area where the sky is the limit.

“We are confident that within a few years, more than 50% of customer interactions will be efficiently managed through AI-powered systems.”

Lam notes that framing HLB’s AI strategy solely as a cost-saving measure “misses the larger, more crucial picture”.

“We are fundamentally transforming how we operate to create greater value for our customers and our community as well as strategic growth. Think of it this way: AI is about creating efficiency multipliers.

“It’s about taking the grunt work out of human tasks, freeing up our employees to focus on what truly matters.”

Wong says yes, AI will save costs but beyond that, the bank is working with like-minded partners to co-create and deliver more value to its customers.

The initiatives include new revenue growth initiatives enabled by predictive data analytics, credit risk reduction through alternative scoring and compliance threshold optimisation for anti-money laundering compliance.

Based on AmBank’s experience, credit paper processing time has been reduced by 30% through AI automation, fraud detection has been sped up and is more targeted, and staff productivity has been increased by 15% through AI-powered tools/insights.

AI vs humans

Can AI really replace humans at banks? Yes, and no, according to the head honchos.

“AI may process data at lightning speed, but it cannot feel the heartbeat of a person, a family, or a community,” says Lam.

He says AI “doesn’t know the dreams that drive a family to buy a home, the anxieties that accompany financial decisions, or the triumphs that come with overcoming challenges.”

“The nuanced judgment, empathy and strategic thinking required for complex financial advisory and personalised customer service remain uniquely human. Building trust and fostering strong client relationships are areas where human interaction is irreplaceable,” he adds.

While AI enhances our capabilities, it cannot replicate the human touch that defines our brand, Lam says.

Khairussaleh says humans “will always be in control of most activities” at Maybank.

“We are about humanising financial services.”

Novan reckons that AI cannot fully replace human expertise, especially in areas that require judgment.

“Humans excel at critical thinking and form complex ideas – areas where AI still falls short. AI brings huge cost and time savings by taking over repetitive tasks like data entry, which are often routine, and data-driven.

“Additionally, AI plays a crucial role in risk management and addressing the growing challenges of data security, especially as bad actors become more sophisticated.”

Mohd Rashid says AI is most effective when applied to data-intensive and repetitive tasks, where it can improve speed, accuracy and scalability.

“We’re leveraging AI to streamline operational processes, particularly in automating repetitive processes. This allows our human workforce to concentrate on higher-level checker responsibilities, ensuring both efficiency and robust oversight.”

He also notes that despite its capabilities, AI cannot replicate human intuition, creativity and emotional intelligence – qualities that are essential to many aspects of business.

“Complex client relationships, for example, rely on trust and personalised financial advice that only human empathy and contextual understanding can provide.

“Strategic decision-making also requires human oversight, particularly for high-stake matters where ethical considerations and broader business objectives must be balanced,” says Mohd Rashid.

He also points out that AI implementation requires human supervision to ensure compliance with regulatory frameworks and mitigate potential biases.

“While AI enhances operational efficiency, human expertise remains irreplaceable in delivering thoughtful, personalised financial guidance.

“For example, AI chatbots have limitations – they can struggle to interpret slang or ambiguous questions and may produce inaccurate outputs (hallucinations), posing reputational risks if left unchecked. Therefore, human audit and prompting would still be required.”

Wong cites some jobs or tasks that AI can do such as high-volume data processing (transaction reconciliations, compliance checks), pattern recognition (fraud alerts, market trend analysis), standardised customer interactions (balance inquiries, payment reminders) and initial credit assessments using alternative data sets.

However, he also notes that nothing can replace the human touch nor the personal relationships that are developed over time.

“These include the empathetic face-to-face advisory, guiding and advising clients through major life decisions, balancing data with compassion in loan restructuring and cultural and community-specific nuances to better fulfil diverse financial needs,” Wong adds.

It’s safe to say that AI is certainly revolutionising the way banking is done.

Its impact and influence will become even more pronounced in the future, and any organisation which does not adopt it is likely to fall far behind.

But as these bankers have said, AI does not equal human.

There is still that inherent need for human intelligence and judgment – at least for now.

While some global predictions do point towards more lay-offs, only time will tell how it will pan out for this sector, both here and globally.