Standard Chartered job cuts put spotlight on HSBC’s AI transformation plans

HSBC chief executive Georges Elhedery has warned that artificial intelligence will reshape the financial industry by eliminating some roles while creating new ones, as global banks accelerate automation plans to cut costs and boost efficiency, as mentioned by Reuters.

Speaking at an investor event in Hong Kong on Wednesday, Elhedery said the banking giant was focused on retraining staff and preparing them for an AI-led future rather than resisting the shift.

“We all know generative AI will destroy certain jobs and will create new jobs,” Elhedery said.

He stressed that HSBC’s priority was to ensure employees adapted to the rapid transformation sweeping through the banking industry.

“Our first mission is for employees to be given training capabilities and productivity tools, so that they can become future-ready, and a better, more productive, higher-performing version of themselves,” Elhedery said.

The comments came just a day after rival lender Standard Chartered revealed plans to automate more operations and reduce its back-office workforce by 15% by 2030.

AI-driven overhaul

Analysts estimate Standard Chartered’s restructuring could lead to around 7,000 job losses.

Speaking during the bank’s investor day, Standard Chartered CEO Bill Winters said automation would increasingly replace lower-value roles.

“We do have job role reductions in favour of the machines, and that will accelerate as we go full-bore into AI,” Winters said at a media briefing on Tuesday.

“It is not cost-cutting, but it is replacing, in some cases, lower-value human capital with the financial capital and the investment capital that we are putting in.”

Winters added that most affected jobs would be non-client-facing positions.

The lender aims to reduce its cost-income ratio to 57 per cent by 2028 from 63 per cent in 2025 as part of its wider efficiency drive.

Retraining focus

Elhedery said HSBC wanted employees to embrace AI rather than fear it.

"But my initial mission is I need 200,000 colleagues with us on this journey. However many will be left at the end of the journey isn't the problem.

"The problem is how can we make sure that those 200,000 colleagues have been given all the capabilities, the training, the tools to make themselves future ready, be more productive versions of themselves."

He added that staff should avoid becoming “disenfranchised, anxious, overwhelmed, and resisting the change.”

As announced by multiple reports, HSBC has been aggressively expanding its AI capabilities. In March, the bank appointed David Rice as its first chief AI officer to oversee AI integration across operations and technology functions.

The bank is now using AI across customer onboarding, financial crime monitoring, contact centres and wealth management operations.

Elhedery said AI had already improved several banking processes.

“On financial crime risk monitoring, we are four times better at detecting financial crime, we are twice as fast in the investigation,” he said.

He also claimed AI had reduced customer onboarding times by 50 per cent through faster background checks and compliance processes.

Industry concerns

The comments from HSBC and Standard Chartered highlight how major lenders are rapidly embracing AI to improve returns and streamline operations amid growing pressure to reduce costs.

Japanese banking group Mizuho also unveiled plans earlier this year to cut up to 5,000 jobs over the next decade as automation spreads across the sector.

Analysts said the shift would likely result in widespread job losses across banking, legal and accounting industries, despite improving operational efficiency.

Kenny Ng Lai-yin, strategist, Everbright Securities International, said AI adoption across financial institutions was accelerating rapidly.

“AI helps improve efficiency, so it is only natural that they will also cut their headcounts,” Ng said.

However, analysts warned that cutting staff too deeply could damage customer experience, particularly in areas requiring personalised financial advice and human interaction.