Moody’s sees 20% chance AI matches mid-level staff by 2030
“The reliance of most financial firms on a relatively small set of foundation AI model and cloud computing providers risks creating a systemic dependency,” Moody’s wrote in its report. The agency explained that “a model outage at one major provider could potentially spread quickly across customers and sectors,” and that as AI adoption deepens, “regulators may increase their focus on operational resilience and third-party concentration in the AI model stack.”
The warning lands as more than 75% of City companies now use AI, according to a UK Treasury select committee report published in January, with insurers and international banks among the biggest adopters. Firms are largely putting the technology to work on administrative tasks or core operations such as processing insurance claims and assessing customers’ creditworthiness.
On the workforce front, Moody’s estimated there is a 20% chance that, by 2030, AI will be able to do the work of a “solid mid-level employee,” acknowledging the potential blow to staff who could be deemed replaceable by the new technology. That prospect has not slowed investment at Lloyds Banking Group, whose chief executive, Charlie Nunn, recently doubled down on AI plans with a £13bn strategy that would use the technology to attract new business, improve efficiency and increase payouts to shareholders. The plans involve £2bn of cost cuts, which Nunn said would affect staff: “That is going to impact work. It is going to require us to continue to reskill people and hire new people, but that’s been my history for 30-odd years in financial services.”
Moody’s also flagged risks around data privacy, cybersecurity, fraud and so-called “deposit flight,” as well as an overdependence on a small number of tech firms. The agency warned of “vendor dependence risk,” meaning “a set of dominant AI model and infrastructure providers could, over time, exert control over the price of AI services.” It said that issue is likely to emerge as the leaders of loss-making generative AI companies — including the ChatGPT creator OpenAI and the Claude owner Anthropic — come under pressure to deliver profits for investors.
The rating agency offered some counterweight to the concern. “While this could pose credit risks to financial firms, they would nevertheless retain control over key assets, including proprietary data,” Moody’s said. It noted that many big banks and insurers have longstanding experience negotiating down technology contracts, and may use open-source AI models and strike key partnerships to offset “dependency risks.”
For banks, AI could also make it easier for customers to move money to accounts offering higher interest rates, raising the possibility that large chunks of cash could shift at short notice. “In this context, depositors’ trust in the institution and the resilience and stability of deposit funding are critical,” Moody’s said.