A new report, entitling 'Digital Disruption' suggests that up to 30% current employees of the banking industry are in the brink of losing jobs due to adoption of new technologies. The 112 page report has been written by a team of seven analysts and strategists from Citigroup and published on Wednesday.
Number of employees at American Banks will drop to 1.8 million in the year 2025, forecasts the reports. The figure is lower from 2.6 million recorded during the year 2015 and 2.9 million before financial crisis. However, even sharper drop of 37% has been forecast for European banks, reports The New York Times.
The report holds startups, rendering services in different operations of the financial industry, responsible for the possible job cuts. Lending startup SoFi and payment companies like PayPal have been rendering such services, according to a news article published in Tech Investor News.
The Citigroup published report appears as the latest analysis predicting for the big changes ahead in the financial industry. The forecast for changes has been co-related with the wave of new financial start-ups broadly inheriting the term 'fintech'. Antony Jenkins, former chief executive for Barclays has commented during last fall that the banking industry is facing a series of 'Uber moments'. He has even cautioned for dropping the number of jobs in the banking industry just to half, reports USA Extra News. Furthermore, banks are being forced to cut jobs due to automation of their operations following new regulations enacted aiming to tackle the volatile market. Promulgation of new regulations time to time has become a norm since the financial crisis. Despite ongoing market turmoil, the banking industry has attracted record investment during the last five years, the report estimates. The industry has received $19 billion in investment last year compared to $1.8 billion in 2010. New technologies have grown the fastest in Asia and more specifically in China. Majority of the online payments are now conducted through technologically empowered non bank players like Tenpay and Alipay. Alipays' payment volume has been estimated 3.3 times compared to its US competitor PayPal. Peer to peer lending or loans from outside banking industry have also boomed in China compared to the US market.
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