30% of Bank jobs may disappear in next five years

News


13 Sep, 2017

30% of Bank jobs may disappear in next five years

Vikram Pandit, the man who ran Citigroup through the financial crisis, said developments in technology could see 30% of banking jobs disappearing in the next five years.

Artificial intelligence and robotics remove the need for excessive staff roles such as back-office functions Pandit said in an interview with Bloomberg on Wednesday. Pandit is now the chief executive officer of Orogen Group, an investment firm that he co-founded last year.

“Everything that happens with artificial intelligence, robotics and natural language -- all of that is going to make processes easier,” said Pandit, who was Citigroup’s chief executive officer from 2007 to 2012. “It’s going to change the back office.”

Wall Street’s biggest firms are using technologies including machine learning and cloud computing to automate their operations, making employees adapt or find new positions. Bank of America Corp.’s Chief Operating Officer Tom Montag in June said that the firm will keep its cost cutting attempts, possibly replacing people with automation.

Even though Pandit’s prediction of job losses is in line with one made by Citigroup last year, his timeline is more aggressive. In a 2016 report, the lender approximated about a 30% reduction between 2015 and 2025, primarily due to automation in retail banking. This figure would see full-time jobs fall by 770,000 in the U.S. and by about 1 million in Europe, Citigroup said.

IN June, JPMorgan Chase & Co. CEO Jamie Dimon warned against overreacting to the impact of technology on jobs. While the bank is using technology to reduce costs, that helps create other opportunities, Dimon said in an interview. He forecast that employee numbers at his firm will continue to rise -- as it hires more technology workers.

The banking industry is becoming “enormously competitive,” Pandit said, adding that he expects the emergence of “specialist providers” as well as consolidation in the industry.

“I see a banking world going from large financial institutions to one that’s a little bit more decentralized,” he said.

Today's News - Bill Gates: Britain’s firms will boom after Brexit