A few minutes’ drive from Bournemouth’s sandy beachfront, on the site of a former farm, lies an unlikely nerve centre of international finance.

Here, miles from the glass towers of London’s Canary Wharf, more than 5,300 staff including compliance officers, analysts and software engineers help process more than $1tn (£750bn) worth of global transactions each day for the largest US bank, JP Morgan.

The sprawling five-hectare (13-acre) campus, which hosted just 650 workers when it opened in 1986, has solidified Dorset’s status as one of Britain’s largest financial hubs outside London.

Now, the financial services industry accounts for 10% of the county’s turnover – the total revenue generated by all businesses in the area – with 2,500 companies, including Nationwide Building Society, the insurer LV=, and the asset manager Canaccord Wealth, collectively employing 24,000 staff, according to the Dorset Chamber of Commerce.

But along with other regional finance centres outside London, from Leeds to Birmingham, and Swindon to Cardiff, it faces an existential threat from AI.

Bosses are considering how the technology can help automate costly human-led jobs, putting at risk a swathe of back-office roles, such as data processors, compliance checkers and entry-level analysts.

The Barclays chief executive, CS Venkatakrishnan, last month announced 5,000 job cuts linked to advances in AI, while another London-headquartered bank, Standard Chartered, said in May it was planning to slash 7,000 roles as it doubled down on artificial intelligence.

AI now poses the biggest threat to the UK’s financial workforce since the 2008 financial crisis, says Caren Evans, a national officer for the Unite union, referring to an era when banks needed multibillion-pound taxpayer bailouts and subsequently embarked on swingeing cost cuts.

Unite members, who include staff at NatWest, Lloyds and Barclays, are “very very worried about AI”, Evans says. “They’re worried about losing their job, they’re worried about having future skills, they’re worried about having sustainable careers.”

All that is hitting staff morale. One Barclays employee said they felt “very undervalued and insignificant”, adding: “It’s kind of hard to be enthusiastic about your work when you know, at any moment, senior executives are thinking about how to get rid of you. You’re not seen as an asset, you’re seen as a problem to be removed.”

The JP Morgan chief executive, Jamie Dimon, has warned of the fallout from AI, saying widespread job losses could spark “civil unrest” unless governments and business supported displaced workers. He said retraining programmes, and even state-sponsored wage support, relocation schemes and early retirement could be needed to ease the blow.

Collateral damage

In Dorset, the banking tech push has already left its mark, with bosses closing Barclays House in Poole in 2022 after 46 years of operation. “It was the original site that all the cheques in the country used to go through, to be checked,” Gareth Sherwood, the president of the Dorset Chamber of Commerce, says. “And of course, that went with digitisation.” That office block still stands empty today.

Sherwood’s organisation has been coaching local business to embrace AI and increase productivity. “There’s winners and losers in all change,” he says. But “we would still encourage people to use human beings”, both to support local jobs, but also mitigate cybersecurity risks and unplanned outages. “You can’t switch a human off in the same way that you can switch an AI off,” he adds.

But if cost-cutting bank bosses start to axe back office roles at pace, there would be ripple effects throughout regional economies such as Dorset. Demand for professional support from law firms and consultancies could start to dry up, and the wider ecosystem of services, such as gyms, hairdressers, restaurants and estate agents, could start to stuffer. “The collateral would be to some of the more service aspects of [the economy],” Sherwood says. “And it’s hard enough to keep young people in this area.”

The Conservative councillor Lawrence Williams has served Littledown and Iford, the ward hosting JP Morgan’s campus, since 2011. He originally moved to the area in the early 1980s, shortly before the bank – then known as Chase Manhattan – took up its lodgings on former farmland.

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The 76-year-old regularly meets JP Morgan bosses, but says he has heard nothing of AI-related job cuts. The bank itself says the Bournemouth campus is a “centre for financial innovation”, adding: “AI will enable us to do more, and we train our people to make the most of it.”

But if companies start to follow in Barclays’ and Standard Chartered’s footsteps, that “could hit quite hard”, particularly for an economy otherwise reliant on seasonal tourism, Williams says.

Threatening the post-industrial banking boom

Bournemouth originally developed as a health and wellness destination for Victorian-era medical patients, which makes it a bit of an outlier amid other regional finance hubs across the UK, whose roots are more closely tied to the Industrial Revolution.

In the late 1800s, banks and insurers congregated around big industry, providing loans and services to Birmingham’s engineering firms, Manchester’s cotton sector, Leeds’ wool operations and Newcastle’s shipbuilding industry. By 1873, approximately four-fifths of the banks in England and Wales were headquartered outside London. (Edinburgh was of course a big financial centre in its own right, but was unique in that companies kept decision-making centralised in the Scottish city.)

Those hubs continued to grow until the latter half of the 20th century, when postwar deindustrialisation took hold, reducing local demand for financing.

But by the mid-1980s, the Thatcher government’s “big bang” changes ushered in an era of deregulation, aimed at transforming London into a global financial powerhouse that would rival New York. With fewer regional industries to tie banks to their local areas, lenders started to merge, triggering a wave of consolidation across the UK’s financial sector.

Many regional offices were maintained, but power shifted back to London. Jobs in the regions were also filled by experienced jobseekers moving out from the capital and south-east England, rather than by local laid-off workers still suffering the fallout of factory closures.

This influx was a double-edged sword for the regions: in many cases, the arrival of wealthier bank staff drove up house prices, but also sparked demand for a wider ecosystem of barber shops, trades people, and entertainment. Overall, it has “very positive, in the sense that these centres – Leedsand Manchester, in particular – have had significant economic benefits ”, Peter Howard-Jones, a senior lecturer in economics at Bournemouth University, says.

Now, two-thirds of the UK’s 2.5 million financial and related professional services workers are based outside London, according to the industry body TheCityUK. And it is one of the main growth engines, accounting for more than 11% of the UK’s total economic output.

“[There is] no question that AI could be significantly disruptive,” Howard-Jones says, especially while there is a “reluctance by governments to control the technology.”

“If human beings are currently driving $1tn of daily transactions [at JP Morgan], and if that can be done by AI, then of the 5,000 jobs currently at JP Morgan in Bournemouth, how many of those are going to be at risk?” Howard-Jones asks.

Should central government be putting together contingency plans for AI-related job cuts across the financial sector? “Heck yes,” Sherwood says. “Because this thing is a revolution alongside the lines of the Industrial Revolution, and represents a socioeconomic threat, not just economic threat.”

Unions gear up for battle

Unions are mobilising. Unite is now drafting an “AI agreement” aimed at protecting workers across the financial sector. Among their asks will be commitments to up-skilling staff, rather than cutting their jobs. This would build on the Financial Services Skills commission’s AI skills compact which was rolled out earlier this year, the union’s Evans says.

AI itself is not the problem, she adds, noting that the technology is genuinely improving some members’ working lives. “But it’s also a massive threat, because it’s being used as an excuse for cost saving and job cuts.”

However, some staff are sceptical, saying unions can do little to stem AI job losses. “This is the first time where it feels like, no matter how skilled you become, how certified you become, it’s not going to matter,” the Barclays employee, who spoke to the Guardian on condition of anonymity, says. “Because the most important thing for these blue-chip companies, is overhead [cost reduction] rather than world-class innovation.”

Barclays says it is investing £150m in staff skills by 2030 and is providing tailored career support and coaching services. “We recognise this is an uncertain time for colleagues and are focused on supporting them through the process,” the bank adds.

Back in Bournemouth – less than four miles from JP Morgan’s campus – groups of university students in caps and gowns have huddled on the sandy boardwalk, posing for proud parents. But what should be a day of celebration is overshadowed by job jitters.

Twenty-five-year-old cybersecurity graduate Amine considered staying in Bournemouth after his studies, and even took work at a large insurance company in the town, hoping it would later turn into a full-time job. But “it’s been quite difficult,” he says. “Because of AI, they’ve cut all the entry-level jobs.”

“I’m not really sure where to go from here so I just hope for the best really,” he adds. “I will go wherever the jobs are.”