The potential for AI-driven job displacement is highest in financial services, with banking most at risk, according to a new report published by Citi.

A new study by the bank finds that more than half of the jobs in banking could be replaced by AI, while 48 per cent of insurance roles could be taken over by the technology.

Capital markets was also high on the list, with Citi suggesting as many as 40 per cent of jobs could potentially be automated in the future.

The bank said that AI will "profoundly" change the future of finance and money, adding that the technology could "commoditise human intelligence".

Research from the bank also reveals that the technology could drive global banking industry profits to $2 trillion by 2028, a nine per cent increase over the next five years.

These figures complement a survey carried out by Citi which found that 93 per cent of financial institution respondents believe AI could improve profitability over the same period.

“The pace of adoption and impact of genAI across industries has been astounding as it becomes clear that it has the potential to revolutionise the banking industry and improve profitability," said Citi chief technology officer, David Griffiths.

But the bank warned that a shift to AI-powered bots poses concerns around data security, compliance, and ethical considerations.

It said that because AI models are known to hallucinate and create information that does not exist, organisations run the risk of AI chatbots "going fully autonomous" and negatively impacting the finances or reputation of businesses.

Citi went on to say that "AI-powered clients" could increase price competition in the finance sector, especially in retail financial services, with the balance of power potentially shifting and profit margins falling.

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