A new report by Wells Fargo & Co., warns that nearly 200,000 US banking jobs are at risk of being displaced by robots.
As we’ve explained in the past, accelerating technological advances in automation, artificial intelligence, and machine learning have the potential to reshape the world in the 2020s through 2030. The collision of these forces could trigger economic disruption far greater than what was seen in the early 20th century.
Across the financial industry, a new wave of investment, somewhere in the tune of $150 billion per year, is being spent on technology, that will “lead to lower costs, with employee compensation accounting for half of all bank expenses,” said Mike Mayo, a senior analyst at Wells Fargo Securities LLC.
The Wells Fargo study, which was first reported by Bloomberg, indicates 20% to 33% of banking jobs will be slashed by 2030. Most affected will be back office, bank branch, call center, and corporate employees. Jobs related to tech sales, advising and consulting will be less affected, according to the study.
“It will be a dramatic change in contact centers, and these are both internal and external,” Michael Tang, a Deloitte partner who leads the consulting firm’s global financial-services innovation practice, 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 A.I. engine because they’re just answering questions.”
Wells Fargo joins a handful of other major banks that have already detailed plans to cut a majority of their workforce by 2030 amid the rapid adoption of automation and artificial intelligence.
According to Coalition Development Ltd. data. R. Martin Chavez, an architect of Goldman Sachs’ push to automate its workforce, said last month, front-office headcount for investment banking and trading declined for the fifth consecutive year in 2018.
In an earlier piece, we described how tens of millions of jobs across the world, and across various industries, would be lost because of robots by 2030.
The 2020s will be known as the great transformation period where corporate America abandons its workforce for automation. The coming job losses, due to automation, will be on par with the automation revolution of agriculture (the transition of farm workers into the industrial sector) from 1900 to 1940.
Robots have so far increased three-fold since the Dot-Com bust. Momentum in automation trends suggests robots will multiply even quicker through the 2020s. The collision of automation in the economy will lead to more volatility, economic swings, and social unrest.