The digital transition is no longer a distant prospect for Europe’s financial sector: it is a present reality. According to the OECD, approximately 95 per cent of banks within the European Union are already employing or developing AI and machine-learning applications. From high-frequency trading to personalised investment advice, AI is touted as a driver of unprecedented efficiency and productivity. Yet beneath the surface of these technological advancements lies a critical governance challenge: how do we ensure that the algorithms managing money, investments, and credit scoring are also fair to the people who operate those systems?

Recent research published by the ETUI highlights a concerning disconnect between the pace of AI adoption and the evolution of labour protections. While the European Union’s landmark AI Act (Regulation 2024/1689) represents a historic step in setting global standards, its current framework remains heavily tilted towards consumer protection. In the financial sector, this means the recently adopted law is highly attentive to the risks of biased credit scoring or insurance-premium calculators, rightly classifying them as “high-risk,” but it offers far fewer safeguards for the workers whose professions are being transformed by these same tools.

The governance gap that leaves workers exposed

For financial sector employees, the integration of AI into their daily activities is a double-edged sword. While many workers report that AI has enhanced their performance and job satisfaction, many others harbour deep anxieties about job security, invasive surveillance, and automated disciplinary measures. These risks are not merely theoretical: algorithmic management can lead to excessive work intensification and “black-box” decision-making that leaves workers with little recourse when things go wrong. Without transparent oversight, the use of AI systems in recruitment or performance monitoring risks reinforcing pre-existing biases, further exacerbating social and economic disparities.

Despite the adoption of the AI Act and subsequent European-level regulatory proposals, the legal landscape across Europe remains fragmented. A comparative review of twelve countries—Denmark, Finland, France, Greece, Hungary, Iceland, Italy, Norway, Romania, Spain, Sweden, and Turkey—reveals a general absence of technology-specific employment legislation to address AI-related labour risks. Most countries still rely on pre-existing data-protection and anti-discrimination laws that were never designed for the era of algorithmic systems. This “governance gap” creates a precarious environment where the power of digital tools can easily outpace the capacity of traditional legal frameworks to protect worker well-being.

Why social dialogue is the missing piece

This is where social dialogue and collective bargaining must step in. Evidence suggests that technological shifts are most successful and sustainable when managed through partnership and collaboration rather than unilateral imposition. Effective governance of AI must therefore move beyond mere technical compliance or vague ethical guidelines: it requires democratic oversight, participatory rule-making, and institutionalised mechanisms for accountability.

Promising models are already emerging. At the European level, the Joint Declaration on the Employment Aspects of Artificial Intelligence, signed by social partners in the banking sector in 2024, provides a unique transnational blueprint for codifying workers’ rights in the age of algorithms. In Spain, the National Collective Labour Agreement for the banking sector has set a high bar by securing specific transparency rights and “human-in-the-loop” guarantees, ensuring that no algorithm has the final word on a worker’s activity and career. Similarly, in Italy, Intesa Sanpaolo’s Committee on Digital Transformation, Artificial Intelligence, and Data Protection offers a template for how companies and trade unions can co-determine the path of technological change through ongoing, structured dialogue.

These “islands of excellence” must become the norm rather than the exception. The future of Europe’s financial sector—and, on a broader scale, of the European social model itself—depends on the ability of institutions and social partners to embed AI within a negotiated framework of rights and duties. This means ensuring that trade unions and workers’ representatives are not just informed but actively consulted on the design and deployment of AI systems. It also means investing in digital skills not as a reactive measure but as a proactive tool for worker empowerment.

As the coming years unfold, the debate over AI governance must shift its focus. Instead of concentrating exclusively on the economic potential of AI, the emphasis must move towards how these technologies can be governed to serve society as a whole. By prioritising structured social dialogue and strengthening collective bargaining mechanisms, European labour markets can reconcile their ambitions for digital innovation with the preservation of a human-centred social model.

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