America's banks to shed 200 jobs in coming years

Not only supermarkets are trying replace their employees with robots. In the next decade, US banks, which are now investing more than $150 billion a year in technology, will use advanced automation to lay off at least 200 workers. It will be "the largest transition from labor to capital" in the history of the industry. This is stated in report analysts Wells Fargo, one of the largest banking holdings in the world.

One of the lead authors of the report, Mike Mayo, claims that America's banks, including Wells Fargo itself, will lose 10-20% of jobs. They are entering the so-called “golden age of efficiency”, when one machine can replace the work of hundreds or even thousands of people. Layoffs will begin at headquarters, call centers and branches. There, job cuts are expected to reach 30%. People will be replaced by better ATMs, chatbots, and software capable of working with big data and cloud computing to make investment decisions. Mayo says:

The next decade will be the most significant for banking technology in history.

Mike Mayo

Reports that “boss, everything is gone, the cast is being removed, the client is leaving” is a fairly common phenomenon in the world. But it's rare that such a worst-case scenario for workers is ever announced by company analysts from the industry itself. Usually such news is brought by non-profit organizations or independent foundations. Now Wells Fargo openly and almost without diplomacy says: there will be no work, do what you want.

The freed money will go to the collection and use of big data, as well as to the development of predictive algorithms. Now there is an automation race between the largest US banks, and whoever quickly gets rid of employees in favor of more powerful software will receive a very solid advantage.

For bank customers, too, a lot will change. Support will be fully taken over by chatbots and autoresponders. Based on key phrases or options selected by the user, they will understand the essence of the issue and offer options for solving the problem. Such systems are already offered by all major banks, but they are not literate enough, and as a result, the issue often still has to be decided by a person, a support employee. According to Wells Fargo, in the next five years, technology will reach a decent level, and there will be no need for such people.

Number of employees of US banks

There will also be a significant reduction in staffing. There will be literally one or two employees inside, but the speed of processing requests will increase. Wells Fargo isn't the only major bank with such big automation plans. Citigroup is about to lay off tens of thousands of workers, and Deutsche Bank is talking about cutting 100. Michael Tang, head of a financial services consulting firm, says:

The changes are quite dramatic, they can be seen both from the inside and outside. We already see signs of this with an abundance of chatbots, and many people do not even notice that they are talking to AI, because it has the answers to the questions they need.

Mike Mayo, as a representative of a large bank, is delighted with such prospects. Presenting his report the other day, he told CNBC:

This is great news! This will lead to record efficiency gains and market share gains for big players like us. Goliath defeats David.

“Goliath wins” is Mayo’s catch phrase now, he walks with it on all television channels. The bottom line is that banks that scale and grow win. And the larger the bank, the stronger it wins. The more money he has to invest in advanced systems, the faster he can begin experiments to replace employees, the easier it is for him to invest in innovation and win market share from the rest. As a result, even more income will be concentrated at the very top, among even fewer people. And at least hundreds of thousands of junior banking specialists - the population of a small city - will remain unemployed. By the way, this year was fired already 60.

Users are also not very happy: many people prefer to communicate with real people who are trying to solve their problems. Even the best automated system will not always be able to find the answer to a non-standard question. In addition, there will be much fewer banks in the future. Those who do not automate will fall away. Even if you can cut 5000 jobs, that's already a huge advantage, it's saving about $350 million a year. Such a large benefit is difficult to obtain by any other method. Therefore, everyone will try to reduce. And the service of communication with a personal consultant may remain for VIP clients.

In the current situation - Goliath wins, and 200 people lose.

Source: habr.com