DBS Bank, Singapore’s largest retail bank, has announced it will begin to cut up to 4,000 jobs in the next three years to replace them with artificial intelligence (AI).
Whilst the move will not affect permanent employees, it will reduce the amount of temporary and contract staff across the 19 markets DBS is active in.
DBS stated that the introduction of AI replacing manual workers is a “natural attrition” of the development of the emerging technology, deploying its usage to help tasks be completed faster in a bid to create almost 1,000 AI-related jobs in the process.
“Over the next three years, we envisage that AI could reduce the need to renew about 4,000 temporary/contract staff across our 19 markets working on specific projects,” said a DBS spokesperson.
The Singapore bank did not disclose whether this shift to AI-based work would affect its national workforce. DBS currently employs around 41,000 people across the world, with 8,000-9,000 being temporary or contract workers.
The news first broke when DBS CEO, Piyush Gupta, announced at an industry conference that the “current projection in the next three years, we’ll shrink our workforce by about 4,000 or 10%”.
The outgoing CEO, who will leave his post next month (March 2025) to be replaced by Rajat Verma, will not oversee the transition from the 4,000 jobs being replaced by AI, but he has been an avid supporter of adopting the technology as the sector continually digitises.
Are banks slow in adopting AI?
In an interview with Bloomberg last October, Gupta believes that only up to 50% of banks have made progress in adopting and integrating AI into their infrastructure, a trend that has seen fintechs overtake their traditional counterparts.
“If I have to look around the landscape, I’d say maybe 50% of companies have made enough progress on that,” said Gupta.
There has been an ongoing AI arms race not just within the finance industry, but across the globe as models have begun to rapidly increase and policymakers are grappling with the burden of balance between innovation and regulation.
While AI investment continues to soar and big tech companies look to gain a stronghold in an increasingly competitive market, banks either lack the technical capabilities or expertise to enact on AI’s both limitless potential and dangerous risks.
A report from Signicat last year revealed that companies are underprepared and understaffed when it comes to AI workforces, especially when it pertains to mitigating AI-related fraud like deepfakes.
DBS Bank may not only be moving with the times to replace the 4,000 workers in favour of AI programming, but also securing its future to gain a step ahead of its competitors. However, this does raise the looming question over the threat that AI poses to workers.
Is this the start of AI replacing humans?
There is an aged-old fear amongst workers that AI’s increasing sophistication will ultimately lead to job losses. Whilst financial institutions maintain that the technology will create skill-based jobs around AI, these large entities could also stand to save money on labour.
A report from the Tony Blair Institute For Global Change revealed that AI’s automation has the ability to rapidly accelerate job tasks through its hardware and that a full integration of AI across the UK private sector could “save almost a quarter of private sector workforce time – equivalent to the annual output of six million workers”.
Some of the findings revealed: “In all cases, AI is expected to generate some job losses, but this labour-substitution effect is only part of the story of how AI will affect labour demand.
“AI is also likely to create new demand for labour by boosting economic growth and speeding the development of new products and services that create entirely new jobs.”
Whether DBS’ next three years of replacing workers with AI becomes a market trend remains to be seen across the banking sector.
AI is such a prominent factor in financial institutions’ growth strategy plans that it could begin to roll out similar practices to DBS. However, companies also be wary of the inevitable backlash from labour unions and task forces, along with potential incoming regulations that could safeguard workers’ rights.
