The AI Revolution in Finance: Threat or Opportunity?
Technology has a history of steamrolling workers—from scribes to switchboard operators, innovation often renders occupations obsolete. Economists call this "creative destruction." Now, the rise of artificial intelligence (AI) has experts speculating that bankers and financiers could be next.
A Citigroup study found that AI has the potential to replace more than 50% of finance industry jobs. This could be dire for cities like Des Moines, where banking and finance account for 29% of the metro area's GDP and employ over 53,000 people.
The Wells Fargo Arena signage being removed symbolizes the bank's declining presence in Des Moines.
Big Bank CEOs Predict Inevitable Job Losses
Top bankers acknowledge AI's impact. Jamie Dimon, CEO of JP Morgan Chase, stated bluntly that AI "will eliminate jobs," though he believes new roles will emerge. Charlie Scharf, CEO of Wells Fargo, echoed this, saying anyone who denies AI will reduce headcount "doesn't know what they're talking about."
Eric Lohmeier, president of Des Moines financial firm NCP, reported that AI has made his analysts more efficient, slowing hiring. "That's a real-time thing that's happening," he said.
Eric Lohmeier sees AI increasing efficiency but reducing hiring needs.
AI: Job Destroyer or Source of Opportunity?
Despite gloomy predictions, some see AI creating opportunities in data analysis, AI platform engineering, and compliance. A World Economic Forum report estimates new technology will displace 92 million workers by 2030 but create 170 million jobs.
Max Leaming of ManpowerGroup noted that past technological revolutions temporarily displaced workers, but AI could be different if it leads to permanent displacement.
James Lewis of the University of Iowa highlighted that AI could help fill a workforce gap from baby boomer retirements, with the finance industry projected to lose 400,000 workers through 2026.
James Lewis believes AI can address talent shortages in insurance and finance.
The Challenge for Cities: AI Doesn't Pay Taxes
Even if AI compensates for personnel gaps, declining workforces challenge local governments because AI doesn't pay taxes. West Des Moines, home to Wells Fargo and Athene, is developing economic plans that include worker retraining programs and repurposing office space.
The city is also investing in data centers, which, while not big employers, add to the tax base. One Microsoft data center in West Des Moines houses the Azure supercomputer used to develop ChatGPT.
Data centers in West Des Moines support AI infrastructure.
Trust and Accountability: What AI Can't Replicate
Universities like Iowa, Iowa State, and Drake are preparing students for an AI-driven world. Kyla Finley, a University of Iowa junior, sees AI as a tool that enhances efficiency but believes human judgment, trust, and accountability remain irreplaceable.
Abram Anders of Iowa State warned that reducing entry-level jobs could create a skills gap, as junior workers won't gain the expertise needed to manage AI effectively.
Kyla Finley plans to leverage AI skills in her finance career.
The Uncertain Future
Experts agree it's too early to predict AI's full impact. Ryan Moffatt of West Des Moines compared forecasts to "predicting the weather"—often inaccurate. However, proactive measures like training programs and strategic planning are crucial to navigating this transformation.
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