Over the next decade, U.S. banks, which are investing $150 billion in technology annually, will use automation to eliminate 200,000 jobs, thus facilitating “the greatest transfer from labor to capital” in the industry’s history. The call is coming from inside the house this time, too—both the projection and the quote come from a recent Wells Fargo report, whose lead author, Mike Mayo, told the Financial Times that he expects the industry to shed 10 percent of all of its jobs. Gizmodo reports:
This, Mayo said, will lay the groundwork for, and I quote, “a golden age of banking efficiency.” The job cuts are slated to hit front offices, call centers, and branches the hardest, where 20-30 percent of those roles will be on the chopping block. They will be replaced by better ATMs, automated chatbots, and software instruments that take advantage of big data and cloud computing to make investment decisions…
It is not rare that a report forecasts the imminent erosion of an industry’s jobs picture, but it is a little rare that a prominent industry analyst for one of said industry’s largest companies is so brazen — even giddy — about trumpeting the imminent loss of those jobs…. It is the confidence and enthusiasm for this schema that is key, as that is what will transform the report into a self-fulfilling prophecy. If the banks buy what Mayo and Wells Fargo are selling, then the report will contribute to an automated arms race between companies to cut staff and purchase enterprise financial software products that is already underway. This is how a lot of corporate automation unfolds.
As a result, we can expect to interact with even more customer service chatbots and automated call menus (whether they work well or not), to see more financial decisions turned over to algorithms, and a continued flood of software products to enter the banking industry. And Wells Fargo certainly won’t be the only bank automating here: As the FT notes, Citigroup is planning to eliminate tens of thousands of call center workers, and Deutsche Bank expects to slash half its ~100,000-strong workforce.