05 Apr Career Opportunities in Banking

Career Opportunities in Banking

New graduates entering the banking and finance industry – and for that matter, career employees too – will have to navigate an evolving landscape that’s seeing jobs shed as companies turn to automated processes. Those changes cover a lot of ground, from the entry-level teller to compliance managers.

Consider the role of the latter: The banking industry spends USD$270 billion per year, or about 10 percent of its operating budget, on people to oversee regulatory and compliance-related responsibilities. But a new report from Citigroup warns that the fast-growing field of “regtech,” and the cost savings that automating these jobs can deliver to industry, is the next wave for artificial intelligence.

Richard Lumb of Accenture, speaking at the 2017 World Economic Forum at Davos, estimates that thousands of such jobs could be eliminated, including those at big institutions like JPMorgan and HSBC, where the number of regulatory-compliance jobs doubled as demands increased. The “RoboCompliance Officer” may soon take over, instead of seeking to keep labor costs down with offshore operations.

What Citi has called “banking’s Uber moment” promises a disruption that may change the way the industry is defined, and eliminate 30 percent of jobs in the process. First-line employees, like bank tellers and branch managers, already see the impacts of online banking and mobile money options. Customers aren’t likely to drive to physical locations and stand in line for paper-based transactions much longer when they embrace apps that make it easy and worry-free to manage their deposits and bills.

The United States already is seeing a 13 percent drop in banking employment, although the losses in some countries are steeper  – including the Nordic region, where about half of jobs have been slashed since 2004. For American bank tellers, an 8 percent drop is predicted in the 2014-2024 forecast from the Bureau of Labor Statistics. That’s about 40,000 positions from the original overall total of 520,500.

The future of those bricks-and-mortar bank offices, according to some analysts, is in consulting and financial advising – but even here, automation is making inroads. ”Assets managed by robo advisors are likely to continue increasing at a fast clip, as banks, insurance companies, and traditional wealth managers embrace the technology,” says Deloitte. Their 2017 Banking & Securities Outlook notes that robotic applications are expected to span across securities operations, “including client screening and background checks, automated trade capture, transaction monitoring and reconciliation, client service reports, and payables and receivables.”

Lending and loans are among the products that fintech startups have championed, although the loan numbers still remain small in China, the U.S. and the UK. China, however, is really taking off in the P2P lending space. Traditional banking is already under pressure from e-commerce technologies like PayPal, or mobile-driven solutions for making payments like M-PESA in Kenya, Tencent’s WeChat red envelope in China, and the PayTM wallet in India, Citi notes.  What’s critical here is that banks aren’t losing a lot of revenue, but their ability to cultivate client relationships and leverage their data is a long-term loss.

Cloud-based tools are the future of banking’s ability to harness the power of big data and predictive analytics to offer customized financial products to clients; Deloitte sees many financial institutions at last shifting away from their legacy systems to subscription-based platforms, again changing the way that banking professionals who remain do their jobs and what they understand those future jobs to mean.

Their employers need to understand clearly who and what they’ll need moving forward, which means a new investment in technology skills. “We’re facing massive shutdowns of branches and infrastructure which will save banks a lot of money, but they are going to have to invest in computer coding, which is a really expensive piece, and that’s the reality,” says Christine Duhaime, a Toronto attorney, financial crimes expert, and founder of the Digital Finance Institute who recently spoke to American Banker.

That knowledge is even more true for banking professionals, whose responsibilities and skills will include more tech interface than ever before.