As the automation tsunami gathers pace, it’s not a good time to be working in banking. Or is it?
The banking sector is one of the first frontiers of job transformation. So can HR play a role in ensuring employees have an opportunity to acquire new skills while transitioning to working seamlessly alongside the robots?
The chief executives of NAB, Andrew Thorburn announced last week that the bank is embarking on a big cost-cutting program that will see it shed 6000 jobs over the next three years. But it also plans to create 2000 new jobs as it “reshapes” its workforce with a focus on more automated processes.
For bank employees, it’s a time of “massive upheaval and change” acknowledges the Finance Sector Union, which has warned that it believes more large-scale job losses are on the horizon.
Anna Bligh, CEO of the Australian Bankers Association, says that automation will continue to replace some of the lower skill banking jobs, and employment numbers may well decline further.
“At the other end of the spectrum, banks are already becoming more like technology companies and there will be high demand for people with technical skills,” says Bligh.
The banks are approaching the changes by trying to identify and cultivate technology-minded employees who can be retrained. NAB chief executive Andrew Thorburn says that, where possible, the bank will retrain staff with the “aptitude and commitment” to do so, and expects that some of the job losses will come from natural attrition.
Over at Westpac, the bank’s chief information officer Dave Curran recently warned a business audience in Sydney that bank employees over 35 risked “career carnage” by failing to adapt to the wave of automation and new technologies.
Westpac has responded by setting up inhouse training to upgrade staff’s technology skills on the job.
“The worst days of my working career are the days that people are made redundant while at the same time we’re hiring. We need to get to a point where our people are taking charge and wanting to upskill,” Curran said.
“Right now much of the workforce is hanging on by its fingernails … we’re falling asleep at the wheel.”
Certainly, that picture of redundancy and reinvestment in new types of employees is being reproduced globally. This week, for example, Dutch bank ING announced that it would be cutting 5800 jobs as part of a “digital transformation” and saving $1billion in the process.
The bank estimates that redundancy payments will cost 1.1 billion Euros, which when added to the IT investment to replace people with technology adds up to more than $2billion.
But Anna Bligh doesn’t believe the industry will see a complete end to customer-facing roles.
“When it comes to paying bills, people are happy to use their mobile devices but when it comes to the really big life decisions, mortgages and investments, they want to seek advice. They may not always choose banks but they will seek advice face-to-face. So we predict the industry will become more competitive and require more people with a broad range of skills.”
Macquarie Bank, whose Board was recently joined by the former Governor of the Reserve Bank, has no doubt served as a model for high technology approaches to the Australian “big four” banks, as would the overseas banks with Australian operations. Whether the “big 4” can replicate the technology and the resulting benefits enjoyed by these other banks will depend to a large extent on the co-operation of the FSU, which historically has enjoyed a closer relationship with the “big 4” than it has with other banks. Good sense should dictate that the union gets on board inevitable change at the… Read more »
Good point re FSU compliance. Given union history and the culture more broadly, good luck with that. Good sense has seldom played a role – and doesn’t serve purpose. This is a huge challenge and I think the only way is to inform members directly of the obvious impact the tech market is having and how to frankly deal with that in a seriously rapidly changing environment.
The banks may need to ensure that technolgy compnaies do not take over their banking business.They already have the skilled people and technology-it would be easier for them to buy in the necessary banking know how.
There have been major fraus in Indian banks they used the swift chatting system as a tool to communicate while frauding.Indian government trying to manage these type of activity.