AI could free up 40% of banks' middle and back-office capacity by 2030: BCG Report

Artificial intelligence (AI) could free up as much as 40 per cent of the existing workforce capacity in middle- and back-office banking functions by 2030, as banks increasingly shift towards technology-led operations, according to a report by Boston Consulting Group (BCG).

The report said leading corporate and investment banks are expected to move from operating models led by humans with AI supporting individual tasks to technology-led models in which AI is widely used across operations.

It said "BCG estimates that up to 40 per cent of current full-time-equivalent capacity in middle- and back-office functions could be freed up by 2030, measured against today's job profiles. Freed capacity is not the same as a net headcount reduction: much of it may be absorbed by new roles as banks redeploy staff toward higher-value, judgment-intensive work."


The report said the way banks redesign their operations will determine whether they can handle business growth efficiently while maintaining profitability.

It also highlighted that the corporate and investment banking revenue, including that of nonbank financial institutions, is on track to reach a record USD 1.1 trillion in 2026, up more than 7 per cent from 2025. The total revenue pool is projected to reach about USD 1.4 trillion by 2030, growing roughly 5 per cent annually.

BCG said the growth in banking revenues creates an opportunity for banks to invest in technology and build the capabilities needed to serve clients more efficiently.

By 2030, leading corporate and investment banks are expected to maintain a cost-to-income ratio of roughly 53 per cent and a return on tangible equity of roughly 21 per cent.

In comparison, lagging banks are projected to have a cost-to-income ratio of roughly 68 per cent and a return on tangible equity of roughly 10 per cent.

The cost-to-income ratio measures how much a bank spends to generate income, while return on tangible equity measures profitability relative to tangible shareholder equity.

"By 2030, the leading banks' models will be technology-led and broadly AI-enabled, and the operating model will determine whether growth can be served at attractive economics," BCG said in the report.

The report also cautioned that banks should not delay changes simply because their current businesses are performing well. It said institutions that move early could gain an advantage as technology, talent and client relationships become increasingly important to future growth.