A recent report from Wells Fargo showed that banking will be the next industry hit by technology, with a significant number of jobs forecast to be lost over the next decade.
According to the research, some 200,000 jobs will be replaced by robots over the next 10 years throughout the financial industry in the United States. It has revealed that back office, bank branch, call center and corporate employees are being cut by about a fifth to a third.
The financial sector in the US spends more on tech than any other industry, about $150 billion annually, according to Mike Mayo, a senior analyst at Wells Fargo Securities.
He said that the industry has underperformed the market by 70 percent this century, but the investment in technology should pay off by lowering costs over time, particularly for larger banks.
“This should lead to record efficiency and market share gains by scale players, reflecting our theme, ‘Goliath is Winning,’” said Mayo.
He explained: “The next decade should be the biggest decade for banks in technology in history. You’re about to see the biggest capital for labor swap in history.”
Automation can reduce the amount of repetitive work being done by humans, such as data input in a mortgage application. “You have a lot less errors, you need a lot less people to do it, and the customer is a lot happier too,” the analyst said.
Michael Tang, a Deloitte partner who leads the consulting firm’s global financial services innovation practice, said it will be a “dramatic change” in contact centers, and these are both internal and external. “We’re already seeing signs of it with chatbots, and some people don’t even know that they’re chatting with an AI engine because they’re just answering questions.”
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