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Fintech axe to fall on a third of banking jobs over next 10 years

More than a third of jobs at European banks will disappear over the next decade as the adoption of fintech-based services grows

A report from US banking group Citigroup predicts that more than a third of banking jobs in Europe will disappear over the next decade as new financial services technology takes over.

In its Digital Disruption report, Citigroup said 37% of jobs at European banks will go, with the employee headcount dropping from 2.89 million in 2015 to 1.82 in 2025. Numbers hit a peak of 3.26 million in 2007, just before the financial crisis.

The current trend around digital financial services technology, known as fintech, is seeing customers move to their smartphones to do their banking and a rise in demand for real-time transactions.

A recent EY study of more than 10,000 digitally active consumers in Australia, Canada, Hong Kong, Singapore, the UK and the US found that about 3,000 had used fintech. Transactional-based services were the most used.

According to the Citigroup report, the adoption of fintech is not likely to slow. It pointed out that investment in fintech companies soared from $1.8bn in 2010 to $19bn last year, with the bulk (75%) going into personal and SME banking technology.

The Citigroup report said that as more transactions are automated and completed on mobile phones, through advances in fintech, so more staff will move from transaction-based to advisory-based roles

Jonathan Larsen, global retail and mortgage business head at Citigroup, who was previously the global head of retail banking at the group, said that over 60% of retail banking employees are doing manual processing jobs. “If all the current manual processing can be replaced by automation, these jobs can disappear or evolve,” he added.

“It’s all about transactional efficiency.”

Job cuts

Banks in the UK are already reducing staff numbers and replacing people with technology. In 2014 Lloyds Banking Group said it was cutting 9,000 jobs and closing around 150 branches to focus more on its digital strategy.

Earlier this year the Royal Bank of Scotland said an automated financial advice service, dubbed robo-advice, had led to the loss of 220 face-to-face adviser roles.

And it is not just the UK. In 2014 Dutch bank ING announced almost 3,000 job cuts in its IT department, back office and call centres. The bank said it is moving to simplified IT systems and automation, at a cost of €200m for two years from 2015.

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