Banks Will Cut Millions of Jobs in The Next Decade Because of Technology

by Linda Zaikovska, UXDA Co-Founder / CFO / Business Analyst

Many job titles have disappeared throughout history, and the reason for that is technology. The idea behind technology was to make human life much easier and more convenient, e.g., calculating incredibly complex numbers, waking up to your favourite tune, contacting people from a remote location, to name just a few. All the technological progress you see is done just to accommodate our laziness and raise our comfort level.

Now, I do encourage you to think about the things you dislike doing—regarding banking, that is.

In recent time, we see that news with frightening headlines appear more often:

- Banking's 'Uber moment' is already happening — 100,000 bankers lost their jobs
- Bank of America to cut up to 8,000 jobs
- Deutsche Bank to shut 188 German branches, cut 3,000 staff
- Bank of Montreal to cut more than 1,800 jobs
- RBS bank sheds another 900 jobs in cost-cutting drive
- Lloyds Bank announces 525 job losses

Why some people hate any communication with banks? Maybe because service is too slow, and the outcome of the conversations depends on the bank consultant’s mood and depth of knowledge. Banks branches are filled with people with similar needs, who need to sign, accept or receive something. This could result standing in line for hours just to sign one paper or receive acceptance on credit card.

These are only some of pitfalls in the banking world. There are many customers who experience even more frustrations, and some of them even pay for terrible consultations and bad banking experiences.

Aim of technology is to fix all of this and in fact, it is already doing it. Many Fintech startups and challenger banks are working hard to bring features that will enhance the user experience with banks. This means that technological possibilities are here to disrupt the banking industry. And this could replace millions of bank employees with smart lines of code that can fully automate their jobs in near future.

So let’s name key factors that will have a huge impact on the banking industry in the next decade:

1. Artificial Intelligence (AI) instead of support centers

Never again will you have to wait in a call line to receive consultation on any matter. Soon, AI assistants will start to become a must for every practice in a customer-centered business. This actually means that banks will need less customer support, and even no support center, to resolve their customers’ issues. This decreased dependency will result in fewer banking branches.

2. Digitalization instead of branch lines

No more waiting in branch lines to provide necessary documents and sign needed ones. Online digital document signatures with high security IDs are solving this issue. You just receive your documents on your online banking website or email, open them, sign them and that's it. This is literally a bank branch killer feature. After this is applied to every single bank, I see no other need for a bank branch, do you?

3. Robo advisors instead of expensive consultants

You don't need to rely on so-called “investment experts.” Robo investment advisors can do it for free while eliminating human error. There are too many people who get paid to play with your money and take zero to no responsibility if something goes wrong. That is the reason why teams of smart people have created robo advisors. These platforms assess your income and risk level and suggest the best possible result to invest for your future.

4. Automatic scoring and fast mortgage

Some banks are really challenging this industry by partnering with companies that develop housing. Since banks are the owners of your home until you pay off the full amount of your mortgage, why not complete all the legal documents on their own and just deliver you keys to your new home, and all of this can actually be done automatically. Banks can use big data, open APIs and predictive analytics to ensure automatic credit scoring. There will only be a need for one person, who will deliver the keys; however, even the need for the delivery person could be eliminated in the future with drone delivery and further automatisation being developed.

5. Blockchain instead of middlemen

Nowadays, thanks to digital technology, we have seen a huge impact from instant services. Customer expectations are increased by online shopping, instant messaging, fast delivery, etc. How can multiple days waiting for payment execution by banks still exist with this technology? Blockchain is going change the landscape forever through real-time payment processing based on transparent and instant transaction infrastructure. No need for middlemen with their high fees and low response time.

Technology is meant to change everything around us; for years, it has changed manufacturing, logistics and medicine, and now it’s banking’s turn. Thousands of bank branches have already closed in the U.S. and Europe in the last couple of years. More and more customers prefer online and mobile banking and expect a satisfying digital banking experience.

All of this will cause millions of bank employees to lose their job all around the world in the next decade, but they had to see it coming; progress is invading traditional banking!

Thank you!

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Linda Zaikovska

Co-Founder of UX Design Agency
CFO & Business Analyst

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Alberts Pumpurs
Account Director & UX Architect

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