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In Banking, 70% of Front-Office Jobs Will Be Dislocated By AI (americanbanker.com) 138

Posted by msmash from the closer-assessment dept.
An anonymous reader shares a report: Some bankers and observers have suggested that only the boring parts of jobs, drudgery like data entry and filling out forms, will disappear so the humans will be able to focus on more interesting tasks, and that no actual jobs will be lost. Bank employees themselves seem to think this. In an Accenture survey released last week of 1,300 nonexecutive bank employees, 67% said they believe AI will improve their work-life balance, and 57% expect it will expand their career prospects.

But Autonomous Research also issued a report last week that estimated that in the U.S. alone, 2.5 million financial services employees will be "exposed" to AI technologies in the front, middle and back office -- 1.2 million working in banking and lending, 460,000 in investment management, and 865,000 in insurance. "These functions will see 20-40% productivity gains, or unemployment, depending on your vantage point," the report stated. About $1 trillion in costs will be exposed to AI transformation in financial services sectors by 2030, according to the report; $450 million of this would in banking. In banking, 70% of front-office jobs will be dislocated by AI, the researchers say: 485,000 tellers, 219,000 customer service representatives, and 174,000 loan interviewers and clerks. They will be replaced by chatbots, voice assistants and automated authentication and biometric technology.

And 96,000 financial managers and 13,000 compliance officers will be laid off as AI-based anti-money-laundering, anti-fraud, compliance and monitoring software fills in. Another 250,000 loan officers will lose their jobs to AI-based credit underwriting and smart contracts technology.
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In Banking, 70% of Front-Office Jobs Will Be Dislocated By AI More

In Banking, 70% of Front-Office Jobs Will Be Dislocated By AI

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  • No problem (Score:3, Insightful)

    by Anonymous Coward on Tuesday May 08, 2018 @07:51PM (#56577758)

    No problem so long as we can repeatedly press "star", "pound", or "0" until we're connected to a human.

  • We should be sunk in unemployment (Score:4, Insightful)

    by Dallas May ( 4891515 ) on Tuesday May 08, 2018 @07:55PM (#56577784)

    The end of slavery was going to take all the jobs. Then it was going to be industrialization that was going to take all the jobs. Then it was going to be immigrants. Than automation. Then globalization. Now it's immigrants again that are taking all the jobs.

    Yet, after all that, we still have jobs in this nation.

    Something tells me that even with the future of AI people will still find things to do.

    • Re:We should be sunk in unemployment (Score:5, Interesting)

      by 110010001000 ( 697113 ) on Tuesday May 08, 2018 @07:59PM (#56577810) Homepage Journal
      Meanwhile in the real world, AI is limited to playing Go and Chess and image recognition and the US has a 3.9% unemployment rate.

      • Re: (Score:2)

        by Tablizer ( 95088 )

        And I suspect AI is writing all these AI doom articles; they are suspiciously similar.

        • Actually this AI nonsense is being pushed by VC who are desperate to latch on to the next new thing.

          • Re:We should be sunk in unemployment (Score:4, Insightful)

            by Tablizer ( 95088 ) on Tuesday May 08, 2018 @09:47PM (#56578300) Journal

            Time for a different fad bubble, AI getting tiresome. Think!

            IOT buttplugs
            Moon orbit vacations
            Self-flying cars
            Segway roller-skates
            Dog control brain implants
            Trump wigs with hidden sensors & telemetry
            Wooden underwear
            Self diagnosis webcam pills
            Poop analysis Tricorder
            Hello Kitty porn
            Methane-flavored gum
            Battle-bots with AR-15's
            3D goat-se stickers
            Plaid trash-cans
            Plain kilts
            Transparent kilts
            Transparent wooden underwear
            Blue orange juice
            MS Bob rebirth
            MS Bob + Clippy porn
            MS Bob + Hello Kitty porn
            Linux toothbrushes (with Emacs, of course)
            A Beowulf cluster of Linux toothbrushes
            Linux kilts

      • Re: (Score:2)

        by mark-t ( 151149 )
        And perhaps ironically, playing chess and go are areas where human players are more desirable than computer opponents, despite the latter being technically superior.
      • in an economy with a "3.9% unemployment rate". That should tell you something if you're even paying a _little_ attention. That unemployment rate is bunk. People left the job market when they couldn't get jobs that paid enough to go to work. As the economy got worse they eventually ran out of money or relatives and had to do whatever. Hence the 'gig' economy and what not.
        • Baloney. Wages are stagnant due to the top 1% taking the money from the other 99%. There is no one bargaining for the 99% in 2018, mostly due to the decline of the unions.

          • Re: (Score:1)

            by Anonymous Coward

            Baloney. Wages are stagnant due to the top 1% taking the money from the other 99%. There is no one bargaining for the 99% in 2018, mostly due to the decline of the unions.

            It's mostly because dumbfucks voted for Reagan, and his Trickle Down economics.

            Then those same dumbfucks voted for Twitler who just did it to us again with a permanent tax cut for the 1% and a tax cut for the rest of us that expires in a few years. Just wait 'til those cuts expire and watch the howling begin.

            AFAICT the decline of the unions is a symptom. Two much Breitbart and Koch bros. piss in the water makes people vote crazy. The minority voted for Twitler, but the Republica^H^H^H^H^H^H^H^H^HNazis gerry

      • Re: (Score:3, Insightful)

        by seven of five ( 578993 )
        Yes. Take a good look at that glorious 3.9 percent rate. This number is touted despite the 63% participation rate (if you've given up finding a regular job, you're not counted.) Also, if you have a PhD and your job is picking dildos in an Amazon warehouse, that counts as 100% full time employment.

        Although the 3.9 percent rate ain't bad, it conceals a LOT of dry rot. Capitalism via AI is going to massacre the middle class.
    • Yes, there was employment after the industrial revolution. It took about 80 years for new tech to catch up and replace the jobs lost. During that time there was mass unemployment, poverty and wars. Lots of wars. Two lost generations. But hey, the survivors will thank us, right?

    • The end of slavery was going to take all the jobs.

      I.....don't remember that.

    • For something to come along and solve our employment issues would require a massive leap into areas we haven't yet discovered (or a plague). When we went from Agriculture to Industry there was a shift in society. The shift from Industry to Service also necessitated a change and was fairly bad for vast swathes of the West. Let's see what happens when we lose another industry - there just aren't enough new jobs out there to do full-time hours.
    • Comment removed based on user account deletion

    • The end of slavery was going to take all the jobs. Then it was going to be industrialization that was going to take all the jobs. Then it was going to be immigrants. Than automation. Then globalization. Now it's immigrants again that are taking all the jobs.

      Yet, after all that, we still have jobs in this nation.

      Something tells me that even with the future of AI people will still find things to do.

      People can find "things" to do now. Hell, I can think of a dozen things I'd rather be doing. We likely ALL can. The reason we don't is because a lot of "things" we want to do don't pay worth a shit, which tends to limit you to a life of poverty. Not unlike Welfare 2.0 (a.k.a. UBI) will.

      The other mistake you're making is looking at history. This particular round of evolution makes comparing it to history wrong because all throughout history we've simply told humans to "go get an education". Since autom

    • Re: (Score:1)

      by AvitarX ( 172628 )

      Many of the jobs were taken.

      For example ag went from 80% of the jobs to under 10%

      Sure, that's better in the long run, but a lot of people suffered as it happened. If 70% (or 20-40%, the summary states both) of bank jobs go away, it's going to suck for a lot of people.

    • You neglected to mention that wages are largely stagnant and have been for decades in actual dollars and are below where they were in inflation adjusted dollars. So yes we still have jobs, but by removing enough of them the ones that remain get worse and worse since so many people are desperate for them.
    • Well, yes and no. Unemployment is low, but wages have been very flat despite the low unemployment. And there are a lot of places in this country where good paying jobs (in manufacturing and mining, for example) have gone away to be replaced by much lower paying jobs. The economic disruption is real, even if unemployment is low. I do not claim that we can or should prevent this development, nor do I have an idea about how to prevent the bad consequences. But it worries me a great deal.

  • Already gone (Score:3)

    by petes_PoV ( 912422 ) on Tuesday May 08, 2018 @07:56PM (#56577788)

    I don't know how much more AI can reduce the number of manual jobs in banks. In Europe most activities can, and are, performed by ATMs. Either ones in-branch, in a halfway lobby or street-facing. Here they don't just dispense cash, buy will accept pay-ins of cash or cheques, allow you to order statements, chequebooks (if there are still any people who use them?) and they will even scan bills and pay them. The bill-paying system can also set up a direct debit so the same bill will be paid automatically in the future if you wish.

    The only people who seem to actually require human interaction are those who are uncomfortable with the thought of pressing buttons and following on-screen instructions and those few who need something unusual such as a foreign currency conversion (although banks offer the worst exchange rates) or who want to pay-in a bagfull of pennies.

    • Balderdash. Personally, I abhor shopping in stores that have reduced human employment by use of self-checkout, and I vote with my wallet.

      Sure, I use Amazon and other online companies when the price discrepancy is significant, but, I will pay a bit more to keep local brick and mortar shops open... if for no other reason than to promote competition, and the very survival of local stores.

      #Dinosaur

      • People line up to avoid using check out [twitter.com].

      • You won't have a choice (Score:5, Insightful)

        by rsilvergun ( 571051 ) on Tuesday May 08, 2018 @11:18PM (#56578576)
        we're giving more and more money to a smaller and smaller group of people. Rather than "trickle down" they're using that money to buy out their competitors. They've got so much of it they can and will pay 2-3x what any sane person would. Then they can make their money back because they have a virtual monopoly. Years of weak anti-trust enforcement in the name of ending "job-killing regulations" lets them do it.

        The people who are setting you up have been hard at work on it since Regan was in the Whitehouse. Obama was a minor bump in the road (very minor, he's still a Corporate Democrat) but they've bought out pretty much everything now. That last tax cut was overwhelmingly unpopular. A Tax Cut. Unpopular. Let that sink in. And It _still_ passed. The ruling class were going around saying if it didn't they'd cut the politicians off. We've got open bribery and nobody seems to care. Seriously, at this point I don't think you or me stand a chance...

      • Hey look, grandpa still carries a wallet. And I don't mean a bitcoin wallet.

      • Self check out has it's place. At the food store for instance if I have a bunch of different stuff and produce I prefer the cashier as their system is much better to handle this kind of purchase. But if I run in the store to get one item the self checkout is better.

    • Yes, this reduction of bank employees has come in waves during my life: credit cards replaced check books, online banking replaced paying bills at banks, ATM:s replaced handling cash at banks.

      The only people left in a bank are negotiating loans or troubleshooting the situations when the machines don't cut it - yet.

    • "and they will even scan bills and pay them."

      Until the image recognition fails because something is hand written and you need a human to do it manually.

      The only people pressing for reducing actual humans in banks are the banks themselves (to save money) and millenial geeks who break out in a cold sweat whenever they have to engage in human interaction. Normal people actually like having a fallback option of an actual person being able to help.

    • You're describing the 'ordinary' features of a bank - and yes, I'd agree that they're mostly automated. The awesomely-good-at-customer-service banks like Barclays and HSBC have done away with most of the humans and just put cash machines in their branches. This allows them to keep paying vast sums in rent and upkeep, yet provide an even more terrible service than they used to.

      However, all banks have to deal with 'exceptions'. These are the things that happen all the time but aren't part of 'normal' activity

  • There still seems to be individuals who want that face to face interaction with a person. I know an android may fill in that aspect of business in replacing the face to face but that's years off in both robotics and AI with human behavior so it can seem relatable. The financial institution I work for seems to be focusing on relationships with the community. One thing they could automate(or eliminate) is middle management.

  • There will come a time with AIs when they are advanced enough to recognise and provoke emotional reactions in people to get a corresponding response. This is what Narcissistic people do and I think it's reasonable to draw the comparison because AIs don't have any emotions, it's a computer.

    I came to this realisation about narcissists from a book I am writing that is a study of their style of psychological abuse. What I observed was that for those people they are disconnected from the normal emotions of

  • Think of what some smart people can do with an AI:
    "Actually, I'm paying off a mortgage early."
    AI: You're in the wrong line, customer. Over there
  • It seems to be a revolution but infact it will hurt the humans.
  • AI will strip more jobs than foreign workers already do.... the only way you will get better work/life balance is if you actually own the AI, or the business that uses it.

  • But who am I kidding? Bankers are all about making more money for themselves, and screw the customer and the horse he rode in on.
    So this will make probably make the experience of dealing with banks even more teeth-grindingly frustrating.

  • They said the same about the ATM and in return that made it cheaper to open more bank offices, essentially creating more banking jobs. Those doom and gloom folks also forget that people are very attached to their hard earned money and rather trust a person than a machine. Having real people at real brick and mortar locations will become the biggest differentiator.
  • Why is this never discussed? Decision making at the executive level could much more efficiently be carried out by AI.

  • I'm sure a lot of people think that getting rid of all the overhead in every industry is a good idea...everything will be super-cheap, no one will pay for expensive middlemen in a transaction, etc. What I think people don't realize is that this overhead they want to get rid of is what's actually holding the economy together.

    Especially in banking, both front- and back-office workers make at least a decent middle-class salary, and some make much more than that. If the pace of worker replacement is too fast, a

    • I'm sure a lot of people think that getting rid of all the overhead in every industry is a good idea...everything will be super-cheap, no one will pay for expensive middlemen in a transaction, etc. What I think people don't realize is that this overhead they want to get rid of is what's actually holding the economy together.

      Especially in banking, both front- and back-office workers make at least a decent middle-class salary, and some make much more than that. If the pace of worker replacement is too fast, all the consumption these workers use their pay for will be removed from the system over a very short time. These workers won't pay taxes, won't buy houses and cars, won't have children, etc. Corporate office work used to be a secure alternative to factory work or the service industries...but it looks like we're in for a big change. What I wonder is what these workers will end up doing...I worked in banking IT earlier in my career and there are legions of people essentially doing manual paperwork processing, even though the paper is computer data these days.

      All I'm saying is that if we want AI to take over, we're going to have to rip down the entire work-to-consume economic model, and that is not going away without a major fight.

      Exactly. The optimist was hoping for the Jetson's type of leisure. Instead we got everyone replaced / outsourced and those who remain work harder than ever. Race to the bottom is a very accurate summary.

  • When I actually need to go into the bank for something it's because it's something their webpage or telephone automated system can't handle and therefore I need an actual human being to help me, not some half-assed pseudo-intelligent so-called deep-learning algorithm 'expert' system.
  • Well, I have to admit whenever I go into a bank it is generally pretty boring. Presumably the AI wouldn't have to be very "intelligent." But maybe I'm just being snarky.

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