A quiet revolution is spreading in the gleaming towers of Manhattan’s financial district. While investors chase artificial intelligence stocks to stratospheric valuations, the banking sector’s most astute strategists are orchestrating a different play entirely. They are not betting on AI’s promise but positioning for its disruption.

The evidence lies buried in earnings guidance that appears almost suspiciously conservative. Major US banks have set expectations for second-quarter results that analysts describe as “deceptively low,” with the financials sector projected to grow earnings by just 2.9 per cent. Yet this apparent pessimism masks a calculated strategy: banks are deliberately sandbagging expectations ahead of what industry insiders believe will be the most significant credit expansion opportunity in a generation. The catalyst is not economic growth or monetary easing, but mass workforce displacement. As Nvidia’s Jensen Huang warned last week, AI could eliminate half of all entry-level white-collar positions within five years, potentially spiking unemployment to 20 per cent. What markets interpret as a productivity revolution, banks recognise as a credit bonanza. According to CPA Trendlines' research, private equity firms have poured nearly $29 billion into accounting firms since 2020, with 25 deals completed this year alone. This is not random consolidation; it is strategic positioning for AI-driven automation that will reshape entire industries. “Private equity firms are racing to find assets leveraging AI to compress monthly close cycles, minimise errors, boost margins, and consolidate market share,” notes a recent analysis of the sector’s transformation. The implication is that no white-collar sector is immune if accounting, a profession built on routine cognitive tasks, can be automated at scale.

Banks understand the mathematics of disruption better than most. When 88 per cent of workers believe AI will lead to job displacement, as recent research indicates, the resulting credit demand follows predictable patterns. Corporate restructuring loans surge as companies automate operations. Personal lending spikes as displaced workers seek retraining or entrepreneurship financing. Asset-based lending expands as businesses liquidate to fund transformation.

The World Economic Forum estimates AI will eliminate 85 million jobs by 2025 while creating 170 million new ones globally. Banks are positioning for both sides of this equation. The 85 million displaced workers will need credit to retrain, relocate, or launch businesses. The companies creating 170 million new positions will require financing to build AI-enabled operations.

Consider the asset-based lending market, which is projected to reach $1.3 trillion by 2030 from $701 billion in 2024. This 10.3 per cent compound annual growth rate reflects not just economic expansion, but structural transformation as companies pledge assets to finance AI adoption and workforce restructuring.

The banking sector’s earnings expectations appear conservative precisely because executives cannot publicly acknowledge their displacement strategy. Admitting to profit from mass unemployment would invite regulatory scrutiny and reputational damage. Instead, they speak in euphemisms about “supporting economic transformation” and “facilitating workforce transitions.” Yet the positioning is unmistakable. JPMorgan Chase projects 2025 net interest income of approximately $90 billion, excluding markets revenue. This guidance assumes traditional lending patterns, not the credit surge that displacement will generate. When earnings exceed expectations, as they inevitably will, banks will attribute the outperformance to “better than anticipated economic conditions” rather than their prescient positioning for AI disruption.

By acquiring accounting firms and layering in automation technology, PE firms are creating templates for workforce displacement across industries. These firms become laboratories for AI implementation, generating data on optimal automation ratios, retraining costs, and productivity gains. Banks financing these acquisitions gain invaluable intelligence on displacement patterns and credit requirements.

In this way, banks are preparing for a fundamental shift in credit risk assessment. Traditional metrics like employment history, salary stability, and industry tenure become obsolete when entire professions face automation. New models must evaluate retraining potential, entrepreneurial capability, and adaptation speed. Banks developing these capabilities first will capture disproportionate market share. The displacement credit boom will unfold in three waves. First, corporate restructuring loans are needed as companies automate operations and shed workers. Second, personal credit is available for displaced workers seeking retraining or starting businesses. Third, growth financing for companies scaling AI-enabled operations and hiring transformed workforces.

Banks' positioning for this sequence is deliberately understating near-term earnings potential. When displacement accelerates, as Anthropic CEO Dario Amodei predicts it will within five years, credit demand will surge beyond current forecasting models. The institutions prepared for this reality will deliver earnings surprises that reshape sector valuations. However, the market’s fixation on AI technology stocks misses the deeper opportunity. While Nvidia’s $4 trillion valuation reflects AI’s computational promise, banks’ conservative earnings guidance conceals their positioning for AI’s human cost. The real windfall lies not in processing power, but in financing the workforce transformation that processing power will demand.

Banks will reveal their true earnings potential when the displacement credit boom arrives, and the evidence suggests it has already begun. The sector’s current “deceptively low” expectations will prove to be strategic positioning for the most significant credit expansion opportunity since the post-war economic boom. Those who recognise this interconnection now will profit from the disruption others fear to acknowledge.