The Banking Executive Magazine - September 2023 Issue

There has never been a period in his- tory during which artificial intelli- gence (AI) has captured the world’s imagination as much as it has today. But with the sophistication of gener- ative AI (GenAI) applications such as ChatGPT now expanding at a breath- less pace, the fear that automated technology might soon take over large swathes of jobs has also be- come more palpable than ever. And while it might have been believed once upon a time that it was the lower-skilled, more repetitive work that was most at risk of being con- signed to the dustbin of history by the AI revolution, the enormous ad- vances in brainpower and human- like abilities of the latest AI applications mean that so-called “white collar” work is also looking increasingly vulnerable amidst a thorough disruption of the entire global labour market. As this revolution gets into full swing, frequent analyses of just how impact- ful AI will be for the world of work are now coming to the fore. From an economic perspective, for example, Goldman Sachs expects AI to deliver 7 percent more (or almost $7 trillion) in global gross domestic product (GDP) and lift productivity growth by 1.5 percentage points over a 10-year period, whilst ushering in “sweeping changes” to the global economy. “Despite significant uncertainty around the potential for generative AI, its ability to generate content that is indistinguishable from human-cre- ated output and to break down com- munication barriers between humans and machines reflects a major ad- vancement with potentially large macroeconomic effects,” Goldman Sachs economists Joseph Briggs and Devesh Kodnani wrote in a report published on April 5. The report also projects that this new wave of AI systems could have size- able effects on global employment trends, with shifts in workflows trig- gered by these advances potentially exposing the equivalent of a stagger- ing 300 million full-time jobs to au- tomation. That said, not all of that automated work will translate into layoffs. “Although the impact of AI on the labor market is likely to be sig- nificant, most jobs and industries are only partially exposed to automation and are thus more likely to be com- plemented rather than substituted by AI,” the authors noted. In the United States, for instance, the Goldman Sachs economists estimated that around two-thirds of occupations are exposed to at least some degree of AI automation, and that of those occu- pations, between one-quarter and one-half of their workloads could be replaced. These are not concerns that can be filed away for the future. Rather, there is plenty of evidence that AI is already replacing jobs. On May 1, for example, IBM announced that it would pause its hiring for non-cus- tomer-facing roles that the tech giant believes could be replaced by AI over the coming years, which Chief Executive Officer Arvind Krishna said could amount to some 7,800 jobs. “There is no blanket hiring ‘pause’ in place. IBM is being deliberate and thoughtful in our hiring with a focus on revenue-generating roles, and we’re being very selective when fill- ing jobs that don’t directly touch our clients or technology,” an IBM spokesperson told Business Insider. “We are actively hiring for thousands of positions right now.” According to the non-partisan think tank Pew Research Center, 19 per- cent of American workers in 2022 were in the jobs most exposed to AI, in which the most important activi- the BANKING EXECUTIVE 42 ISSUE 177 SEPTEMBER 2023 Career Chronicle HOW AI IS EXPECTED TO IMPACT FUTURE EMPLOYMENT TRENDS