Will every second banker lose his or her job in the next decade?
The answer to that question is probably “yes,” according to the chief executive officer of Nordea Bank AB, Casper von Koskull. Others in the industry have made similar predictions, including former Citigroup Inc. CEO Vikram Pandit. But not all bank executives take the same view.
At SEB AB, one of Sweden’s four biggest banks, CEO Johan Torgeby says there may even be more employees 10 years from now. Some positions will become redundant, but new roles will replace them and existing staff will be retrained. The key question is one of productivity and growth, he argues.
In an interview in Stockholm, Torgeby said that “almost everyone” working in the financial industry today “needs to assume” that somewhere between 10 percent and 90 percent of what they know will be outdated in the digital age.
Given the fundamental changes gripping the industry, it’s more likely than not that banks will be able to get by with fewer humans, Torgeby said.
“But it could also be that you grow,” he said. “If you can grow your operations, then you may be as many or more in the future, but you’d still need a big productivity increase.”
Nordea said last month it will cut 6,000 jobs, 2,000 of which are consultants, in an effort to adapt to the digital age. A week later, the National Bank of Australia Ltd. said it was cutting 4,000 jobs for similar reasons. The announcements seemed to give a glimpse of what the future might look like for an industry that’s already lost hundreds of thousands of jobs since the 2008 financial crisis.
Svenska Handelsbanken AB stands out as a major Swedish bank to have added jobs over the past decade. It’s also been outspoken on its commitment to keeping branches. But overall, Sweden’s biggest banks have reduced their branch network in the country by about 30 percent.
Torgeby said the Nordea CEO’s predictions on industry-wide headcount struck him as a “pretty strong statement.”
“From our perspective, we have no plans for anything similar to what they have done,” he said. “But what’s happening right now with digitization, and what we’re working on — to continuously improve ourselves — is in that direction.”
Birgitte Bonnesen, the CEO of Swedbank AB, says “there will be changes maybe in the numbers” of employees, “but more significantly in the content” of what they do. “Many people will move into different roles.”