According to a Wells Fargo research report, robots will eliminate 200,000 jobs in the banking industry within the next 10 years.
These numbers seem astounding and mind-boggling. However, the robot overhaul has been in motion for some time. While others use the term “robots,” it’s fair to say that this also refers to artificial intelligence, advanced technology and sophisticated software.
Like many business sectors, banks are under siege from a confluence of factors working against them. The current trend of low and negative interest rates is an anathema to their business model. When rates are too low, the banks’ margins are squeezed so tight that it’s hard for them to turn a profit. Lending is the cash-cow division for most banks. When this area is under pressure, it doesn’t bode well for the bottom line.
Banks are worried about a myriad of other factors, including how the decade-long stock market surge will end—in a mild recession or something far worse. Fears of a possible recession may curtail future business. Trade and tariff wars, nasty politics, Brexit, climate control, FinTech disruptors, low trading volumes, a recent poor slate of controversial IPOs and geopolitical uncertainty and tensions all take their toll.
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