Bank of England Governor Andrew Bailey has issued a stark warning concerning the impact of AI on the future of work, claiming that although AI will reshape jobs rather than replace them, it will impact career trajectories.
While experts have raised many such concerns over the last couple of years, this warning comes at a time when AI is no longer largely restricted to isolated pilot projects, but is instead becoming deeply ingrained into core business workflows.
Until now, the financial services sector hasn’t seen quite such a profound impact from generative and agentic AI systems as other industries, due in part to its high-risk and highly regulated nature. Bailey likened the current wave of AI innovation to that of the Industrial Revolution, warning that the sector must prepare for workers being pushed out of certain roles—particularly routine white-collar jobs.
Of course, it’s no secret that AI will displace many traditional knowledge work roles, and these trends are already well underway across the board. However, what is concerning is the potential threats to the traditional career ladder in finance, where entry-level roles are largely rendered obsolete, making the barriers to entry all the higher. These concerns are further backed up by Morgan Stanley’s recent prediction that over 200,000 banking jobs will be cut in Europe alone by 2030.
However, unlike the widespread scaremongering of a few years ago, when generative AI entered the limelight, the BoE governor took a more measured approach, stating that AI won’t necessarily lead to mass unemployment. Bailey argued that, much like in previous industrial revolutions, many jobs will evolve rather than vanish entirely. That said, AI is a undoubtedly a disruptive force that will encourage financial services companies to focus on AI-focused innovation and automation in tandem with skills development.
Investing in human capital remains as important as ever, simply because it’s essential for realizing the productivity benefits of AI without adding risk—something that the financial services sector is acutely aware of. This is also the case in the fintech world which, despite being technology-driven more than anything else, must realize that the lines between fintech and traditional financial services are blurring rapidly. The need to focus on augmentation first, rather than automation, applies to fintech every bit as much, simple because fintech has become such a critical part of the financial services supply chain.
Bailey also acknowledged concerns about a potential AI bubble in tech valuations, drawing parallels from the dot.com boom of the 90s. As the financial services sector—and fintech arguable even more so—races to implement and integrate AI solutions, it must not lose sight of accountability, AI ethics, and regulatory compliance. All those critical factors hinge on human expertise, and over-reliance on AI without robust human oversight can quickly result in everything crashing down.