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Throughout all of 2025, each of the major banks has made reductions in headcounts for a variety of reasons.
Many are due to AI replacing roles, others due to offshoring staff, and some much vaguer.
Dr Angel Zhong, associate professor of finance at RMIT University, said it would be “convenient” to blame these job cuts on AI, but believes this is merely a “scapegoat for deeper, longstanding structural issues.”
She said the main reason behind these cuts is “intense margin compression from competition” and an industry-wide pivot to digital-first services.
“This isn’t about replacing people with robots; it’s about banks finally addressing inefficiencies they should have tackled years ago to survive in a new competitive landscape,” Zhong said.
While this digital shift is the natural progression for many industries, in banking, it risks alienating older Aussies and regional communities who rely on the face-to-face services.
“A national audit shows half of our remote Aboriginal communities still lack mobile coverage, making a mandatory digital-first approach dangerous and exclusionary,” Zhong added.
She urged banks to consider all Australians when implementing digitisation. A “truly modern bank” should be investing in both AI development and the consumers who require traditional structures.
It’s natural for people to be wary and even scared of AI, as it threatens roles in just about every industry.
Zhong believes this fear is misdirected. She said, “AI is not the job-destroying villain in this story”, and it has the potential to improve the capability of workers, not replace them.
However, streamlined processes free up time, which naturally could lead to a reduction in headcounts.
Like many industries, AI is having a profound impact on banking. When profit margins can be reduced through the slimming of employees, companies are always going to capitalise.
“The entry-level banking job is evolving. The future won’t require armies of junior analysts to compile reports. Instead, we’ll need a smaller number of highly skilled professionals who can act as AI-savvy data checkers, strategic thinkers, and ethical overseers,” Zhong said.
While the need for these data-driven roles will be reduced, she said the industry will demand a reskilling effort, with an emphasis on digital literacy.
“With the sector posting huge collective profits, these cuts are perceived as a stark choice between corporate greed and social responsibility,” Zhong concluded.
“Banks have an obligation to manage this transition responsibly, by investing in extensive retraining programs, ensuring fair redundancy terms, and maintaining service accessibility. Offshoring hundreds of roles while reporting record profits deeply erodes public trust.”
[Related: Are BDMs the next casualty in the major banks’ AI-driven overhaul?]
