DBS Group, Southeast Asia’s largest lender, predicts that the use of artificial intelligence could affect 4,000 contract and temporary jobs at the bank in the near future, a DBS spokesperson said.

“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,” they said.

“We expect the reduction in workforce will come from natural attrition as these temporary and contract roles are completed over the next few years.”

Notably, permanent staff will remain unaffected. The plan offers reassurance amid broader industry concerns over job security.

With a total workforce of around 41,000 employees, DBS currently employs between 8,000 and 9,000 contract and temporary staff.

The anticipated reduction – which DBS describes as being part of “natural attrition” – will occur as contract and temporary roles are phased out.

The idea of having a leaner workforce at DBS came from outgoing CEO Piyush Gupta after he shared insights at an industry conference in Mumbai. The statements were verified by Bloomberg.

“My current projection in the next three years, we’ll shrink our workforce by about 4,000 or 10%,” Gupta said earlier.

However, the CEO also revealed 1,000 new positions will be created within AI – a move that reflects the bank’s commitment to digital transformation.

“In my 15 years of being a CEO, for the first time, I’m struggling to create jobs,” said Gupta, who is set to hand over the reins as CEO to Tan Su Shan on 28 March.

Also Read: DBS to continue transformation with new CEO Tan Su Shan

“So far, I’ve always had a line of sight to what jobs I can create. This time, I’m struggling to say how I will repurpose people to create jobs,” Gupta said.

The statement, which made headlines, highlights the paradox that many industry leaders face: while AI brings efficiency, it also demands adjustments to workforce strategies.

With plans for a more streamlined workforce, DBS also said it would continue to invest in upskilling and reskilling employees to be future ready.

“We have identified around 13,000 staff for upskilling or reskilling and, to date, over 10,000 have commenced their respective learning roadmaps, including on skills such as AI and data,” the DBS spokersperson told People Matters Global.

DBS is the latest example of a bank accelerating towards AI-powered efficiencies, as nascent tech reshapes roles traditionally performed by humans.

The expanding role of AI in global banking

The workforce adjustments are part of a broader industry trend. A recent Bloomberg Intelligence report estimated that global banks could cut up to 200,000 jobs in the next three to five years as AI increasingly automates routine tasks.

Chief information and technology officers surveyed for the report anticipate a net workforce reduction of about 3%.

This shift raises important questions about the future of banking jobs.

While AI is expected to take over repetitive, rules-based functions such as compliance monitoring, fraud detection, and customer service, it also creates opportunities in AI oversight, data analysis, and cybersecurity.

Many banks, including JPMorgan Chase, argue that AI will not necessarily eliminate jobs but will redefine them.

Teresa Heitsenrether, who leads JPMorgan Chase’s AI initiatives, stated in November that generative AI has so far augmented roles rather than replaced them.

This perspective highlights the ongoing debate: is AI merely shifting the nature of work, or does it pose an existential threat to traditional employment structures?

For financial institutions, proactive investment in retraining programmes, upskilling initiatives, and reskilling efforts will determine whether employees can transition into new roles seamlessly.

Also Read: DBS sets aside $32M for special employee bonus

Profitability and workforce evolution

The AI-driven workforce restructuring at DBS comes on the back of strong financial performance. In its latest earnings announcement, the bank reported an 11% increase in net profit for the fourth quarter of 2024, reaching S$2.52 billion compared to S$2.27 billion a year earlier.

While slightly below market expectations, the growth reflects the bank’s ability to navigate economic shifts while investing in technological advancements.

Financial institutions worldwide are under increasing pressure to enhance profitability while managing operational costs. AI presents an attractive solution, reducing reliance on human labour while improving efficiency and accuracy in decision-making.

However, the banking industry must tread carefully to balance automation with workforce sustainability.

The human factor: Managing change in an AI-driven workplace

DBS’s workforce transition, however, raises concerns about the human impact of AI adoption. As banks automate more processes, there is a growing need to manage change effectively.

For organisations, this entails maintaining oversight on workforce management. Transparent communication, employee engagement, and retraining efforts will also be crucial in mitigating resistance to change.

Leaders must also recognise the psychological impact of AI-driven staff cuts, ensuring affected employees have access to career support and alternative employment pathways.

A recent study by the World Economic Forum suggests that, while AI will displace 92 million jobs, it will also create some 170 million new opportunities in digital industries.

Bridging the gap between today’s available workforce skills and the demands of an AI-powered future is the real challenge.

In response, companies like DBS are investing heavily in digital literacy programmes and AI training for employees. Some involve direct partnerships with educational institutions, government-led upskilling initiatives, and in-house training schemes designed to prepare workers for new technological realities.

Lessons for the wider business community

DBS’s workforce realignment serves as a bellwether for businesses in other sectors undergoing digital transformation. AI adoption is a force reshaping industries, from finance to health care and retail.

The coming years will determine whether AI integration in banking can deliver the right ethos of leveraging technology to enhance efficiency – all while safeguarding human capital from the threat of displacement.

AI remains a catalyst for organisational reinvention. But the future of work will ultimately be shaped by how businesses blend AI capabilities with human ingenuity.