No expert will deny that Artificial Intelligence (AI) is changing the banking landscape drastically and will continue to do so in the coming years. However, not everyone seems to agree on the impact AI will have on banker’s jobs. While some say that the majority of bankers will face unemployment in the next decade, others are less convinced about the negative impact that bankers will experience due to automation (Marria, 2018).
Surely, if a task can be automated by a machine, there is very little incentive for banks to let humans perform it. Not only is there a positive correlation between revenue and digitalizing in banks, the advantages of the increased efficiency also outweigh the disadvantages of restructuring, like the moral issues of laying off staff (Chandarana, Faridi, Moon & Schulz, 2017). Hence, at least thirty percent of tasks in the banking sector will be taken over by AI. This mainly entails tasks that require basic cognitive skills, such as administration, data processing and customer service (Bughin, Hazan, Lund, Dahlström, Wiesinger & Subramaniam, 2018; Marria, 2018).
However, the fact that thirty percent of tasks are being replaced, does not necessarily mean that thirty percent of all bankers will lose their job. Because less time has to be spent on routine tasks, bankers can focus more on other activities, such as customer relation management and research, amplifying the importance of creativity and problem-solving skills (Autor, 2015; Chandarana et al., 2017). Apart from a renewed need for management occupations, the demand for technology experts and analyst will increase (Autor, 2015; Bughin et al., 2018; Manning, 2018). Singapore’s OCBC Bank even went as far as too hire more employees in 2018. It’s head of AI Lab explained: “Besides data scientists, who develop AI algorithms and models, we are also hiring more engineers to manage these AI applications, and business managers who understand how to leverage AI within the business to increase efficiencies and improve customer experiences.” (Manning, 2018).
Even though there are examples of positive implications of AI like the one above, it cannot be ignored that banks have laid off a significant number of employees in previous years (Chandarana et al., 2017). Bankers performing routine task will have to make place for AI and the new jobs created by automation will most likely not outweigh the number of positions lost (Marria, 2018). Therefore, there is no denying that the decreased need for human involvement will cause job loss to some extent, but to claim the Era of the Banker is over is premature to say the least.
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Bughun, J., Hazan, E., Lund, S., Dahlström, P., Wiesinger, A. & Subramaniam, A. (2018).
Skill shift: Automation and the future of the workforce. McKinsey Global Institute. Retrieved September 15, 2019 from https://www.mckinsey.com/featured-insights/future-of-work/skill-shift-automation-and-the-future-of-the-workforce#part%202
Chandarana, D., Faridi, F., Moon, J. & Schulz, C. (2017). How cognitive technologies are
transforming capital markets. McKinsey Global Institute. Retrieved September 15, 2019 from https://www.mckinsey.com/industries/financial-services/our-insights/cognitive-technologies-in-capital-markets
Manning, J. (2018, September 26). How AI is disrupting the banking industry. International
Banker. Retrieved September 15 2019 from https://internationalbanker.com/banking/how-ai-is-disrupting-the-banking-industry/
Marria, V. (2018, July 2018). Is Artificial Intelligence Replacing Jobs In Banking? Forbes.
Retrieved September 15 2019 from https://www.forbes.com/sites/vishalmarria/2018/09/26/is-artificial-intelligence-replacing-jobs-in-banking/#4054d76a3c55
