The Strategist

30% of American bankers will lose jobs in five years

09/14/2017 - 14:23

Former head of Citigroup financial corporation Vikram Pandit made a disappointing forecast for employees of the banking industry. In an interview with Bloomberg TV, he said that years, new technologies could turn 30% of bank employees in the next five years.

AMISOM Public Information
AMISOM Public Information
According to Vikram, robotization, artificial intelligence and machine learning will significantly reduce the need for human resources in banking, especially in the operating industries.

The largest companies on Wall Street use technology, including computer training and cloud computing, to automate operations. This forces many employees to adapt in these conditions or to seek new positions for themselves. Executive Director of Bank of America Corp. Tom Montag said in June that the bank will continue to reduce costs by switching to new technologies that can replace people.

He added that the bank is carefully studying the question of how to optimize business processes, and cited an example of trade with payments in foreign currency. "If you look at foreign currency transactions, it's already fully automated execution of transactions with financial instruments. How to reduce participation of people in this process? How to move from 70% of automation to 99%? Such things will help make our business more efficient," - said the banker.

Last year, Cititgroup’s management also spoke about future significant reduction of jobs in the banking sector, although the time interval in the forecast was much wider. According to the financial institute’s report for March 2016, 30% of employees will be dismissed because of the automation of processes in the banking business for the period from 2015 to 2025. American firms will reduce 770 thousand full-time employees and about 1 million workers in Europe.

Vikram Pandit was the executive director of the financial conglomerate Citigroup from December 2007 until his sudden resignation on October 16, 2012. He was in charge of the bank during the difficult period when the global financial market was in crisis. In the last year of Vikram's work in Citi, the bank was haunted by setbacks. The corporation failed the stress test, and the Federal Reserve rejected the capitalization plan. However, Pandit's resignation happened the day after presentation of a fairly strong report for the third quarter of 2012. Experts did not expect the banker to decide to leave. Now, Pandit heads his own investment company Orogen Group.