New tech could save banks $70B by 2025
North American banks could save more than $70 billion through 2025 using technology to automate jobs or assist employees, according to estimates from Accenture Plc.
The study released Thursday found that the broader group of financial services firms in the region could save $87 billion to $140 billion through automation and augmentation of more than half their tasks. The cost savings could be as high as $44 billion in insurance and $25 billion in capital markets.
“There are certainly some jobs that will be automated,” said Cathinka Wahlstrom, head of Accenture’s financial services practice in North America. But for those employees who remain, technology can be a boon, she said. “It’s an opportunity as opposed to something to fear. Done right, it’s going to be great both in terms of productivity savings and ultimately client experience.”
Banks and other financial firms are grappling with the rapid pace of technological change by overhauling operations and investing in digital offerings for clients. That means eliminating some job functions and retraining staff.
“Some roles will change dramatically in years to come,” Accenture said. It estimated more than 50% of tasks performed by loan officers, financial advisers, bank supervisors, loan clerks and tellers could be automated and augmented by 2025.
In capital markets, more than half of the work done by financial analysts, sales agents, brokerage clerks and statisticians could be automated or augmented in the same period. Financial industry executives surveyed by Accenture said only a quarter of employees are ready to work with intelligent technologies.
In wholesale markets, foreign exchange has made wide use of technology while fixed income lagged, Wahlstrom said. Portfolio analysis is also becoming more automated. Even in private banking, where the wealthiest clients expect bespoke service from human advisers, digital tools are in demand.
As technology allows firms to cut costs and become more efficient, machines can also help the human workforce to focus on higher-value work such as innovation, relationship-building and customer service, the consultant said.
“The labor market is really tight, so it’s not like there’s enormous supply,” Wahlstrom said. “The faster and easier thing is for most companies to retrain their employees” to improve their work using technology, she said.