Singapore’s deputy prime minister Gan Kim Yong has advised banks and financial firms in the region to use AI to build and upskill their workforces, rather than simply to cut costs.

At the DBS Leaders Dialogue event held in the city-state, Gan said that organisations in the sector must innovate with AI to stay competitive. "For Singapore, the answer cannot be to hold back change. If we slow AI adoption, we will weaken our competitiveness and ultimately hurt workers more, not less,” he said.

Gan added that AI will change “how banks serve clients, how asset managers allocate capital, how insurers price risk, how compliance teams detect suspicious activities, and how institutions protect themselves against cyber threats”.

The deputy prime minister also warned that organisations should see AI adoption as more than a cost-cutting exercise: "When firms implement AI, they should not only ⁠ask: how much cost can we save? They should also ask: what new roles can we create? How can existing workers be trained for them, and how can relationship managers, analysts, compliance professionals, operations staff and technologists use AI to do higher-value work?”

Gan also urged firms to focus on attracting international AI talent in order to transfer skills to Singaporean workers. The government has committed to working with the private sector to provide AI training to its workforce.

Several high-profile financial institutions have announced plans to embrace AI while cutting jobs in recent weeks.

On Thursday, Jamie Dimon, chief executive of JPMorgan Chase, told Bloomberg Television that AI will reduce banking roles in the medium to long term, and that JPMorgan plans to hire “more AI people and fewer bankers in certain categories”.

HSBC chief executive Georges Elhedery struck a similar tone on Wednesday, telling staff that AI will “destroy certain jobs and will create new jobs”. HSBC is accelerating its AI deployment and in March announced the appointment of its first chief AI officer David Rice.

Standard Chartered has also announced plans to cut 7,800 roles by 2030, equivalent to 15 per cent of corporate function staff, in a move chief executive Bill Winters linked to investment in AI.

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