Banking jobs are at tremendous risk as per the meticulous research conducted by analysts at Wells Fargo. They will soon get supplanted by the digitization of banking systems. The technological upgrade of the global financial institutions is nigh at hand. This will not only streamline the banking process but also create different opportunities.
What About The Old-School Bank Jobs?
According to Wells Fargo, approximately 100,000 jobs are at risk of replacement by technology in the next 5 years.
Mike Mayo, the managing director of Wells Fargo, estimates that digital reform will take over around two-thirds of back-office jobs and workers. And also a third of the roles in the front office. He states:
“Developers are the new bankers. These tend to be higher-paying positions, so it may be the case that while banks reduce headcount, they don’t lower compensation as quickly.”
While acknowledging that a lot of departments and their activities are unnecessary and mostly a toil, Mayo says:
“Some will succumb to technology, but others may require changes in regulation or laws to be fully eliminated. In any event, banks should be able to significantly cut back-office headcount over time.”
The Digital Silver-Lining
To some, this new wave of banking digitization might seem like a technological onslaught. Not everything is as pessimistic as the pandemic-struck world deprived of bare necessities. Mayo hints at the formation of new roles once technology overpowers. It is likely to compensate for a large portion of the jobs lost.
The benefits of the digital reform banks globally are enjoying could lead to a whole new range of possibilities. To begin with, banks with digital upgrades invite more customers than old-school banks. It is undeniable that technology in any sector enhances efficiency. And where the workflow is efficient, people swarm for a better experience. Not only has that, but digitization of banks laid a user-friendly banking procedure with cost-efficiency. And with mobile banking coming into play, the gap between rural and urban user facilitation bridges.
Although there is a surge of job loss, technology will successfully compensate. Many new areas of job requirements will emerge such as cyber security, the research team for innovation in technology, etc. It is only the bank retail sector that is undergoing digital reform. All job losses are temporary because technological upgrades will require some human supervision nevertheless. While customers will enjoy advanced features, newer job opportunities will follow.
Both Banks And Customers Need Digitization
Technology will help banks massively to cut losses and become more streamlined and up to date. It’s a great possibility once we allow for development and modernization in call centers, bank offices, and branches, as Mayo hopes for. The digital transformation is going to curtail all human errors as every decision is data-driven. He is in favor of considering third-party storage systems like the cloud that can help in this process.
Automation, anticipated by Mayo, is a dire necessity if banks are to keep up with Fintech, Bigtech, retail, and others. It would not only benefit customers but also the banks to survive in this cutthroat market where customers incline towards digital banking.
As the danger lingers, it is necessary to adapt and overcome, rather than remaining stagnant in orthodoxy. It has become a need of the highest magnitude to accommodate change since the pandemic. With Covid-19 engulfing nearly all habitation, we must adjust to the new normal. This includes taking utmost precautions about customers’ safety. This can only be done if we digitize and make the user interface seamless and easy to use. Some jobs are lost, but those will be compensated with new opportunities. So the banks must acclimatize their workforce to the possible roles and changes. This will ensure that the loss of jobs is minimal by replacing old responsibilities with new ones.