There’s a looming robot apocalypse in the finance industry. Technology will result in the loss of an estimated 200,000 jobs in the US banking industry over the next decade, according to a report by Wells Fargo. That’s the largest reduction in headcount in the industry’s history.
Finance firms are spending $150 billion annually – more than any other industry – on technology, according to a Bloomberg report. That spending will lead to lower costs – and employee compensation accounts for half of all bank expenses, Wells Fargo Securities senior analyst Mike Mayo told Bloomberg. Banks are cutting back office, branch, call center and corporate employee headcounts by between a fifth and a third. Sales, advising and consulting positions are less affected.
“It will be a dramatic change in contract centers, and these are both internal and external,” Deloitte partner Michael Tang said in the Wells Fargo report. “We’re already seeing signs of it with chatbots, and some people don’t even know that they’re chatting with an AI engine because they’re just answering questions.
Wells Fargo isn’t the only firm predicting a looming human-to-robot shift in the banking industry. Consulting company McKinsey & Co. said in May that it expects headcount for front-office workers like bankers and traders to drop by nearly a third due to automation, Bloomberg reported.
That reduction is already happening. Front-office headcount for investment banking and trading fell for the fifth straight year in 2018, Bloomberg reported.