The competition for tech talent is prompting banks to restructure their real estate portfolios.

Dallas now houses the second highest number of financial services jobs as new business objectives and technology drive the location strategies of banks, including Bank of Montreal, Comerica Bank, and PNC.

ANZ, one of Australia’s ‘big four’ banks, has promised to build a hub for 700 technology workers in a city with a fifth of the country’s information-technology (IT) students.

In Singapore, United Overseas Bank is the largest investor in the city-state’s first smart and sustainable business district.

“While a majority of the largest financial services organizations have contracted their real estate footprint since the onset of the pandemic, leading firms have been selectively expanding in markets that offer scalability and affordability of diverse tech talent,” says Sarah Bouzarouata, JLL’s financial services research lead and author of the report, Driving innovation and resilience in banking: The critical role of real estate strategy.

Hybrid work, cost pressures, changing regulatory requirements and a heightened awareness of privacy and fraud are sweeping through traditional banking, affecting everything from hiring to property and determining how banks design their future offices for the new face of their workforce.

“Deepening and differentiating talent pools while being close to customers is a key agenda,” Bouzarouata says.

JLL's research notes that the banking industry will deliver the largest investments in artificial intelligence as generative AI and machine learning is increasingly used to reduce costs.

Banks worldwide are expected to spend an additional $31 billion on AI embedded in existing systems by 2025 and will deliver the largest AI investments in 2023 across industries.

Meanwhile, the largest banks have increased hiring for software developers and data scientists by 90% since 2018. One example: Morgan Stanley using OpenAI’s GPT4 platform as a financial advisor solution to better serve clients and tap into the firm’s large repository of research and data.

“As banks accelerate towards AI and machine learning, corporate real estate portfolios have a critical role in enabling them to attract and retain top tech talent, provide the necessary infrastructure to support these technologies, and create a flexible and agile workplace that can adapt to changing business needs,” Bouzarouata says. “They have to remain competitive in this digital age.”