Of the main four banks in the UK, there has already been a number of staff cuts in an attempt to save moneyAntony Jenkins, the former Barclays chief executive is the latest in a growing line of finance leaders to predict the growth of technology over staffing. Speaking recently with the BBC, he stated that he believes that at least 50% of roles will be replaced by computers, with the staff cuts coming from back office, customer service and mid-level roles.
Of the main four banks in the UK, there has already been a number of staff cuts in an attempt to save money. Between RBS, Lloyds, Barclays and HSBC, a total of 4,000 jobs have been lost in the past ten years, leaving 4,500 between these major names. Could further job losses be on the way?
That’s certainly what the Bank of England’s chief economist, Andy Haldane, thinks. In what he calls a ‘fourth industrial revolution’, he believes the technological advances in the banking industry will lead to a ‘hollowing out’ of the banking jobs market. He has warned of the importance of learning from our past to avoid the harsh social and economic factors which come with new industrialisation.
He believes this will be of vital importance as we progress in a future where machines do both the cognitive and technical tasks once performed by humans. This future in which humans are made defunct in the business sector is a long way off, though, according to Foteini Agrafioti, head of Royal bank of Canada’s AI research. She states that the problems we’ve solved are still narrow and that there is a misconception that humans and computers can perform on the same level.
Despite this, Artificial Intelligence is not a new thing in banking. In 2010, Santander introduced its red robots to direct guests in its Spanish Visitor Centre. JP Morgan is known to use bots to execute trades, too.
This is not just a British issue. AI has been developing throughout the world, with the Japanese group, Mizuho Financial Group, aiming to reduce its workforce by a third – 19,000 by 2027, replacing each staff member with AI.
The obvious benefits of replacing staff with computers are significant. Computers don’t take days off, which can greatly reduce costs and losses in productivity. Computers, too, don’t tend to make natural mistakes once programmed in a certain way. Still, for customer service roles, there is the challenge of customers themselves fighting against change.
For those staff that remain, an opportunity arises for restructuring and retraining to work in an increasingly technological industry. It is vital that banks look to upskill their existing staff to benefit the industry, but the roles that they were once familiar with, often customer facing roles or administrative tasks, may be changed forever.
While it’s unlikely that this will be something that changes overnight – Mr Jenkins suggested a timeframe of around 10 years – it is something that is looming on the horizon; and those who embrace AI and bolster their business with highly skilled staff to complement it are likely to benefit most in future years.
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