Standard Chartered Bank has positioned artificial intelligence as a core strategic pillar, announcing plans to reduce its workforce by nearly 8,000 employees. This move underscores how AI is profoundly reshaping human resource structures within the financial industry.
The bank, which focuses on Asian markets, stated on Tuesday that it aims to cut its middle and back-office staff by more than 15% by 2030.
Group Chief Executive Bill Winters indicated that the restructuring will impact back-office functions such as human resources, risk, and compliance across its global network, affecting multiple operational centers.
He clarified, "This is not just about cost reduction. It is about replacing lower-value human roles with financial and industrial capital investment in certain areas."
Winters acknowledged that the bank will gradually replace human roles with intelligent systems, a trend expected to accelerate as AI adoption deepens. Concurrently, the bank will conduct employee training programs to facilitate transitions into other roles.
Standard Chartered announced it has already met its annual strategic goal of achieving $1.5 billion in cost savings. During an investor day event in Hong Kong, the bank unveiled new development targets, shifting its focus towards boosting non-interest income. Key growth areas include serving high-net-worth Chinese clients, trade finance, and business with financial institution clients.
The new performance targets are explicit: to raise its return on tangible equity (ROTE) to over 15% by 2028, surpassing the previous target of over 12% by 2026. The goal for 2030 is set above 18%.
Alongside the 15% reduction in back-office support roles, Standard Chartered plans to increase revenue per employee by 20% by 2028 and raise its dividend payout ratio to 30%.
In afternoon trading in Hong Kong, Standard Chartered's stock price rose by 2.5%. The stock has gained 68% year-to-date, with the bank's current market capitalization standing at approximately £42 billion.
As AI proliferation triggers workforce reductions across various sectors, with IT and back-office roles being the first affected, the banking industry is similarly setting new development benchmarks.
Morgan Stanley predicts that over the next five years, the widespread adoption of AI and the shift to online operations could put over 200,000 jobs in the European banking sector at risk.
Winters, the longest-serving CEO of a major UK bank, stated, "We continue to invest in building core capabilities, solidifying our competitive advantages, and steadily achieving robust growth and high-quality profitability. Our development objectives are clear and well-defined."
On the preceding Monday, Standard Chartered announced a management change: Diego De Giorgi, who is leaving later this year to join Apollo Global Management, will be succeeded as Chief Financial Officer by Manus Costello. Costello, the bank's former head of investor relations, previously worked as an industry analyst covering Standard Chartered.
Analysts at Jefferies noted that De Giorgi was a key driver behind Standard Chartered's previous "Fit for Growth" strategic plan.
Late last month, Standard Chartered announced a $190 million provision to hedge against potential risks arising from the conflict between the US, Israel, and Iran, while maintaining its existing performance outlook.
The bank concurrently reported strong quarterly results, with pre-tax profit reaching a record $2.5 billion, a 17% year-on-year increase, slightly exceeding market analyst consensus.
When discussing the strategic positioning differences with competitor HSBC, Winters remarked that HSBC's development trajectory is increasingly converging with that of Standard Chartered.