One of the world’s biggest banks, Deutsche Bank, has announced that it will be replacing a significant portion of its workforce with robots. The financial institution, which is based in Frankfurt, Germany, employs more than 100,000 people. It is not known exactly how many people will be laid off or when, but CEO John Cryan said that the layoffs would involve a “big number” of people.
Cryan won’t be winning any favor with those who will lose their jobs, and those that are keeping their jobs will probably look at him a little differently, too, after some of his comments seemed to indicate a blasé attitude toward so many people losing their livelihoods. In addition to boasting that the move toward automation was part of the firm’s “revolutionary spirit,” he also said that accountants there “spend a lot of the time basically being an abacus.”
“In our banks, we have people behaving like robots doing mechanical things. Tomorrow we’re going to have robots behaving like people,” said Cryan, who became the company’s CEO in June 2015. He is in the midst of carrying out a five-year restructuring plan that has been impacting workers’ structures and bonuses.
In some cases, however, robots will be given tasks that can easily be automated and the human workers will be given more interesting work, such as analyzing numbers rather than merely producing them. Cryan gave the example of an accountant spending three to four weeks producing a single account before moving onto the next one. He suggested that using machines to produce these numbers in just a few hours would free up accountants to form opinions about what the numbers mean and take on more complex and stimulating tasks. Of course, this won’t apply to all or even most positions because he clearly stated his intent to give a “big number” of workers their walking papers.
Banks in trouble
These days, cutting costs is one of the few remaining ways that banks can increase their profits as credit demand and interest rates have been staying low. Cryan is hoping to bring Deutsche Bank’s cost-to-revenue ratio down to 65 percent by 2020; last quarter it reached 86 percent. Cutting 15,000 jobs is a crucial part of his plan to turn things around at the bank.
Deutsche Bank could be looking to imitate the success of Swedish banks, which have efficiency ratios of 50 percent on average and are some of the most profitable lenders in Europe. Their technological proficiency is a huge part of their success, and they’ve been using customer service virtual assistant robots that have female voices that can help people solve many common issues and answer questions.
Robots taking over broad range of jobs
Deutsche Bank workers are not alone; a study by Citi Research and Oxford Martin School revealed that two thirds of American retail jobs have a high risk of disappearing by the year 2030. Autonomous vehicles are set to take over package delivery and inventory tasks in warehouses, while self-checkout lanes are replacing cashiers. After Amazon’s recent takeover of Whole Foods, many workers at the grocery chain are worried their jobs will be lost to robots in keeping with Amazon’s enthusiasm for this approach.
Meanwhile, the Bank of England’s chief economist, Andy Haldane, has warned Brits that robots could threaten as many as 15 million British jobs, not only low-skilled roles but also skilled jobs like clerical, production and administrative tasks.
One can only hope that this won’t go too far. After all, if robots leave droves of people unemployed, no one will have the money to spend on the goods and services they are helping to produce.