The finance market has been disrupted by technology, making way for fintech firms. With automation becoming widespread, finance and technology are consolidating. This digital disruption will allow banks to boost margins through labor-saving automation. Accenture and McLagan predicts eight of world’s 10 largest investment banks will use blockchain to cut their costs by 30%. However, this threatens the job market and the traditional structure of finance firms. It is predicted that hundred of thousands of jobs will be lost, and jobs will significantly change in duties. Citibank predicted that as many as 1.7 million jobs will be lost as banks become digitized.
These is a ethical dilemma in automating jobs. Automation allow banks to lower margins and make customers better off by allowing banks to provide better financial services. With automation, banks will be able to make instant lending decisions, pre-score customers, and make more accurate predictions on default rates. However, the biggest tradeoff is the loss of jobs through automation. Millions could be out of a job and lack the skill set to keep up with technology. Although mass layoffs can be seen as unethical, banks must cut costs and master technology if they want to survive.
Interesting article! Do you think that blockchain will create only positive outcomes for banks, with both lower costs and higher quality services, or will they lose some aspect of quality with less human staff? I think that while banks must take some of these moves to survive, there may be negative outcomes they do not expect. Great blog post!
Great post! Banks have steadily lost jobs over the past 10 years with the rise of online banking and the competition brought about by pure online financial institutions. I think the fate of jobs in the industry will depend on the global economy, and in the US, the movement will be tied to what happens with interest rates over the next 5 to 10 years.
I believe that we are on a innovative track towards becoming a more technologically advanced society. With the help of technology, banks will be able to provide better services at a lower price, and use the money saved to invest into improving the economy. With artificial intelligence and increasing acceptance of technology, I believe that the banks will be better off. While some may be turned-off by the idea of working with robots, the general population will become accepting when they realize the benefits.