CITI: The ‘Uber moment’ for banks is coming — and more than a million people could lose their jobs
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 GPS report on how financial technology is disrupting banks.
“Branches and associated staff costs make up about 65% of the total retail cost base of a larger bank and a lot of these costs can be removed via automation,” the report reads.
“We believe that there could be another ~30% reduction in staff during 2015-2025.”
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- 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.”
He called it the banks’ “Uber moment.”
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 role,” the analysts wrote.
Here’s the number of full-time employees in US banks:
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