Digitization in banking reaches the tipping point- Significant job cuts are coming to Canada's Big 5 Banks
What that actually means in practice remains to be seen. It is already clear is threat the following will and is happening:
- End-to-end digitization and optimization of its branch network.
- Enhanced online and mobile offerings
- Re-platforming of mainframes
- Data center consolidation.
- Reduce in-country data warehouses.
- Reduce the number of global instances for personal and business internet banking.
- Use of cloud platforms for non-business critical systems, with HR cited as an example.
- “Streamlining” of critical operations such as know-your-customer, onboarding and payments operations.
- Eliminate 750 legacy systems and applications from the current total of around 6,700.
- The introduction of new core banking system.
- Deliver IT projects more effectively, including more ‘off the shelf’ solutions.
- Increase use of Agile development.
- A goal of fully-automated data transfer between systems.
US banks keep trimming branches, cutting jobs
- Major banks are making cuts Major banks are making cuts
- Most U.S. consumer banks are cutting jobs and trimming branches.
- Bank of America and Citigroup reduced headcount the most, eliminating about 20,000 staffers between them, according to fourth-quarter earnings reports from each bank. The respective moves amount to 4.6 percent and 4 percent fewer workers at the banks. JPMorgan Chase reported in its earnings that it employs 6,700 fewer workers than a year ago.
- The banks also reduced the number of branches.
- JPMorgan has 3.4 percent fewer branches (5,413 branches and about 235,000 staff at the end of 2015); much of the bank's headcount reduction came from its consumer and community banking division and within investment banking.
- Bank of America operates 129 fewer "financial centers," (2.65 percent) according to its earnings report; and Citigroup ran 4 percent fewer branches at the end of 2015 versus the previous year.
ING bank cuts jobs due to digitization
Further digitization of Dutch bank ING's services is expected to reduce its workforce in the Netherlands by around 1,700 full-time Equivalents (FTEs) over the next three years.
The cuts of jobs will mainly occur at the headquarters of ING Retail Banking and in the back offices, call centers and IT departments in the Netherlands, according to the bank.
BMO Layoffs To Hit 1,850 As Banking Goes Digital
- BMO cuts about 1,850 positions from its workforce as consumers shift more of their banking online and technological advancements allow it to digitize some of its operations.
- There were 46,166 full-time equivalent employees at the bank as of the second quarter, a decline of 616 employees from the previous quarter.
- The lender said it will trim its head count by an additional four per cent, which amounts to roughly 1,846 positions, as it took a $132 million restructuring charge relating to severance costs for employees.
Citi: Technology Could Cost Two Million Bank Employees Their Jobs
- Citigroup Study Report Suggests 30% Job Cuts In US Banking Industry By 2025
- Citigroup Inc. forecasts retail banking automation could spur a 30% decline in banking jobs across the U.S. and Europe over the next decade. That would be the equivalent of eliminating nearly 2 million jobs.
- It says that banking is at a “tipping point” with technology but still only in the early innings of a transition, with just 1% of consumer banking revenues generated from digital channels last year.
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State Street Corp. eyes 7,000 layoffs by 2020
- State Street Corp. plans to shrink its workforce by up to 7,000 workers by 2020 as it fights to jump-start growth stalled by low interest rates and stiff competition.
- Through layoffs, turnover, and moving employees to new ventures, it aims to become a more tech-driven company less reliant on faxes and manual trades.
Barclays’ costs fall 4.5% with increased digitization
- Barclays has revealed a 4.5 percent fall in its costs due to initiatives including increasing automation and digitization.
- Barclays said that it spent £499 million to date (£115 million in six months to June 2014) on the project in its personal and corporate banking division.
- This involved increasing digitization and automation to enable customers self-serve more, and streamlining its wealth business model.
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HSBC looks to digital transformation to support 25,000 job cuts
HSBC sees three main technology drivers that need addressing:
- Exponential digital / mobile adoption.
- Technology firms entering financial.
- Increasing opportunities and risks in data.
Its ‘mile high’ messaging on how to respond to this is:
- Continued investment in digital to make it easier for customers to do business with the bank.
- Implementing tools for front-line staff to make better use of their time.
- Automating more operations to get more out of high quality low cost service centres.
- Getting more for less from what the bank spends on technology.
Bank of America's Earnings Improve in 2Q16 - Digitization is at the heart of this
- Efforts to reduce expenses include a continued focus on digitizing the company's operations as well as continued headcount reductions in back and middle office functions.
- BAC's total revenue expanded 4.5% from the sequential quarter but declined 7% from the year-ago quarter. Overall return on average assets (ROA) was 0.78% in 2Q16, up from 0.50% in the sequential quarter but down from 0.96% in the year-ago quarter.
Scotiabank Investing huge amounts of money to increase their own technology talent pool and develop innovative online services, while making deep cuts in more traditional banking
- Strategic efforts also entail significant job cuts across the bank, including a 7-per-cent reduction in the number of brokers at ScotiaMcLeod, its wealth management arm.
- Investing huge amounts of money to increase their own technology talent pool and develop innovative online services, while making deep cuts in more traditional banking.
TD Bank Lays Off Canada, U.S. Staff After Review
- Chief executive Bharat Masrani told analysts in February that the bank is "streamlining'' its executive and corporate management structures, digitizing some of its processes and cutting back on discretionary spending.
- Cost management has been top of mind for Canadian banks amid slowing loan growth, weak oil prices and rock-bottom interest rates.
- In 2015, Toronto-Dominion Bank cut nearly 1,600 positions, representing 1.9 per cent of its work force, and booked a charge of $686-million, the biggest among its peers.
- For all of 2015, the big banks recorded restructuring charges of more than $1.2-billion, the biggest one-year total for the Big Six going back at least a decade.