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The Human Toll of Digital Banking

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Last week, Barclays announced the layoffs of 1,700 branch employees and blamed the rise of mobile banking. Cashiers, personal bankers, operations specialists, branch managers and assistant managers will all lose their jobs throughout 2014, the U.K. bank said.

A Barclays spokesperson said, "More and more people are choosing to use smart phones and technology for everyday transactions using branches only when they need access to expertise. We are responding by investing in the channels that customers are increasingly using, whilst improving customer service."

Also last week, Bank of America tellers picketed a video-equipped "ATM with Teller Assist" machine in Manhattan, saying the machines threaten teller jobs in favor of cheaper labor at the bank's call centers. The bank said it's not planning to replace tellers, not cutting jobs, and paying branch and video connected tellers the same.

These are two early signs of the human impact of digital banking.

Consumers are using mobile and online banking and video ATMs more all the time, branches are generally becoming smaller and scarcer, and the number of bank branch employees will inevitably shrink. But does this shift have to lead to a net loss of jobs? Can these employees be reallocated, or does the rise of digital banking call for a completely different set of skills and perhaps create new jobs?

"It's a tough question. I think it depends on the company," says Jeff Kaufman, president-retail banking at FirstBank in Denver. "As we reduce the size of our staff at the branches, we have never laid anyone off but have moved those people to other jobs within the company or to new branches we have opened."

FirstBank has been growing, which has created new job opportunities. "We feel strongly that you have to have people readily available to support the technology for customers via phone, chat, and email," Kaufman says.

Research firm Synergistics has seen evidence that digital banking is costing branch jobs. "It is not only mobile banking, but all types of electronic and self-service banking, such as online banking and the use of more sophisticated ATMs that, for example, can take deposits and cash checks in some instances," says CEO William McCracken. "This trend is not new but has been coming on for the last five to ten years. It is finally impacting branch staffing levels and the number of branches in a more significant way."

But while some branch positions, such as tellers, will be cut, McCracken says, others, such as sales and customer service roles, will grow. "There is now a greater need for personnel staffing the fewer branches to be experts in sales and in problem resolution," he says. "These employees will become the 'face' of the bank and will need to be better educated, trained and paid."

Tommy Marshall, partner in Capco's North America banking practice, also sees an ongoing reduction of basic branch jobs, but believes the remaining branch employees will need to be advice givers.

Consumers of all ages are interested in getting advice and guidance from bank branch staff, Marshall contends. "All banks are looking at how to make the best of their branch assets and further their goals in building relationships in the branches," he says. "Citi, PNC, and Wells Fargo are being very creative and looking at different types of layouts and formats where they're bringing tablets into play to allow investigation of banking services and offers. This leads to dialogue with bankers capable of providing advice."

As some traditional branch roles go away, Olof Schybergson, CEO and founder of service design consultancy Fjord, believes the need for experts in the digital domain is going to gather pace quickly.

Branch staff will become purveyors of technology advice, like Genius Bar employees at an Apple Store, he says. Instead of having a computer, branch staff will have a tablet and be trained to troubleshoot problems. "They'll be part of the digital experience as well as the person-to-person experience," he says.

And mobile app development and design jobs will be created, Schybergson says. At Fjord, he looks for three qualities in job candidates: curiosity, collaboration and communication.

"The first and most important one is curiosity we're looking for people who want to explore and learn why people want one thing versus another, because that's critical for design," he says. "The digital and mobile media is moving and changing so fast, if you're not curious you'll be irrelevant."

The ability to collaborate is important because "the way good work is done these days is not in a monogamous big sausage factory, it's in small, highly agile, collaborative self-organizing teams," Schybergson says.

Despite the changes affecting some branch jobs, most industry observers acknowledge that the bank branch is not completely going away any time soon.

"This [Barclays] announcement struck me as a bit odd, I'm a believer that the branch is not dead," Marshall says. "There's a real desire among banks to determine how to have the digital channel complement the branch experience. Omnichannel is the new term for multichannel."
Is "omnichannel" not a cheesy buzzword?

"It's super cheesy," Marshall acknowledges. "It's code for, I am now trying to figure out how mobile and tablet fit in with my web, branch, and voice call experience. It's a catch-all term."

Another change impacting branch staffing is the advent of pop-up branches, such as the one PNC has set up in Atlanta, Marshall notes. "If you go into one, it's very much geared toward sales, less toward transactions.

"There is and will remain a high demand in banks for skilled people that understand how to provide financial advice and help consumers and small businesses with financial needs," Marshall says. "People with that skill set have a lot of job security. Bankers that are focused on supporting transactions are at a greater risk for reduction as new digital technologies take on more transactional activity."

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Comments (2)
Interesting to see the impact of technology on banks and its employees, technology will help banks serve its customers better at the same time banks would also need to engage their customers through their employees/representatives to ensure personalized customer service. I work for McGladrey and there's a newsletter on our site that discusses a few points here that may interest readers, " it offers great advice on retaining and building customer relationships the use of technology and other valuable insights into boosting overall performance @ "Eight ways for your financial institution to boost performance now" http://bit.ly/1fBWe9u
Posted by williamson2703 | Wednesday, November 27 2013 at 5:48AM ET
When the ATM wave began to reduce tellers, wise banks migrated the educated, trainable tellers into customer relations jobs with value added products in fulfillment of High Tech-High Touch. This is more of the same. Unfortunately, the more "high tech" that the employee is, the more challenge it will be for them to become "high touch" and successful in financial assistance. However, there may be opportunity at the offices of independent financial advisers that need help with the backroom volume that will be migrating to them from the banks as the unwise banks simply reduce tech staff and do not add customer financial reps.
Posted by frankarauscher | Wednesday, November 27 2013 at 11:46AM ET
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