Posted on 03/31/2016 7:49:10 AM PDT by SeekAndFind
Banks are quickly approaching their "automation tipping point," and they could soon reduce headcount by as much as 30%.
That's according to a new Citi Global Perspectives & Solutions (GPS) report on how financial technology is disrupting banks.
"Banks' Uber moment will mean a disintermediation of bank branches rather than the banks themselves," the report said.
"Specifically, it will mean the shift to mobile distribution being the main channel of interaction between customers and the bank," the report reads.
That means that there will be less need for bank branches, and the people who work inside them.
"We believe that there could be another ~30% reduction in staff during 2015-2025," the report said (emphasis added).
Bank staffing levels are already down significantly from their pre-financial-crisis peak. The number of branch tellers in the US is down 15% from its 2007 peak.
The Citi analysts predict a 40% to 50% staff reduction from pre-crisis highs.
The job cuts Citi is describing would add up to more than 1.8 million job losses from current levels in the banking sector in the US and Europe over the next 10 years.
That's in line with former Barclays CEO Antony Jenkins' recent prediction that pressure from the tech industry "will compel banks to significantly automate their business" and "that the number of branches and people may decline by as much as 50% over the next years."
But there's a silver lining for certain bank employees.
"As more transactions are automated and done on a mobile phone, we believe there will be a rebalancing of staff from transaction-based roles to advisory-based roles," the analysts wrote.
(Excerpt) Read more at businessinsider.com ...
It’s seems in my town there’s always a new bank opening, my question is, why?
Really??
In my area, anecdotal evidence is that many banks have closed in recent years. A number of former bank buildings became video stores for a while. Then the video stores went out if business. Anyway haven’t seen new banks opening in my area.
I live in a small town. My local bank only hires people fresh off the boat from India. I never understand a darn thing they say me.
Machines would be muuch better.
Money is cheap for banks. Once the interest rates go up they’ll be shutting down.
If we shut down the soviet-style Federal Reserve, banks would be reduced greatly, return to a normal role in our presently highly financialized, debt-ridden society.
I have been with USAA for at least 15 years. No branches. No buildings. No ATMs. I have never had any problems with them. I think all banks should go this route. Ok you ask how do I get cash. Well for one thing all grocery stores allow you to take cash during a transaction. If I need more money, I do go to ATM and take the money out. USAA refunds the fee back to me. It’s great. I also have navy federal Credit Union which is a great bank too. They also refund fees using a non navy federal ATM.
I’m seeing more credit unions, fewer banks.
A new bank or a new branch of an existing bank?
We had been Bank of America customers for 16 years (if you count our banks that BofA acquired) and 6 residences and relocated to a place where BofA was closing its branches and ATMs. We held off on changing to a bank with a local branch by using BofA’s app to deposit our checks and getting cash when we used our debit card at stores. After two months, we closed our BofA account and opened an account at the bank that took over their branches.
Unfortunately, this bank only has branches in 3 states. While it has 5 branches in our city, 4 have 1 drive-up ATM and 1 (a former BofA branch) has 2. Only 2 of the 6 ATMs in the city accept deposits, although we can deposit what few checks we get with their app. BofA’s online banking was far superior to our new bank’s.
6143 banks left in America, including 835 savings institutions. Trend is down. And I do mean down.
Same in my town and I wonder the same thing. Big brand new buildings that hardly anyone goes in. I'm thinking it has to be some kind of asset protection/investment.
I work for a big IT firm with three letters. There is a SIGNIFICANT shift coming in all industries. Much of the top intelligence and expertise can be now codified. We are at the dawn of the cognitive era in IT and we will see a significant shift away from individuals being hired to provide this expertise. No, it will not happen all at once, but it is coming and in the next 20 years, you will see as much of a shift in business has there was between the ‘70s and ‘90’s.
Just as the assembly line worker was replaced by robots, mid manager and even senior manager will be replaced by IT systems. Compare a $350,000 / year senior manager against an IT system that costs about $150,000 in hardware, another $50,000 in licensing, plus it’s share of an IT support staff/organization and then works for pennies per hour of electricity.
“I have been with USAA for at least 15 years. No branches. No buildings. No ATMs. I have never had any problems with them. I think all banks should go this route. Ok you ask how do I get cash. Well for one thing all grocery stores allow you to take cash during a transaction. If I need more money, I do go to ATM and take the money out.”
I have a check for $3K in my hand and I want to cash it. What do I do?
I take a picture front and back and send it that way through my account. I’ve done it 30 times. Most of the times it accepts it right away but sometimes I need to do it twice.
My credit union did away with real live tellers.
Go into a branch and stand in front of a monitor connected to a teller in a central office. Of course you are 2 ft, or less, from the person next to you with a meager partition between.
I hate it.
Go into the branch maybe twice a year. Do some internet banking with them and I guess that suits them just fine.
I hate it.
Most of my banking is with Wells Fargo and real live tellers right in front of me.
Go to any UPS store and deposit it. Then pull the cash from ATM.
Seems like there are quite a few new bank branches in our metro area as well—but they are new locations for existing banks. Banks are our market and the number of individually chartered institutions has been shrinking. 2008 to 2011 was brutal for banks (especially denovos.) Merger activity has picked up a bit but there have only been two new bank charters granted in the past half-dozen years. De novo banks will start to reappear, but with higher regulatory requirements and the expectation of only single-digit annual growth, it isn’t as attractive a proposition as it was pre-downturn.
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