With private equity firms pumping billions of dollars into technologies that will alter or support the financial services and banking industries (“Fintech”) each year, the industry’s software and hardware advances continue to accelerate. These advancements are dramatically changing how customers interact with their bank and are beginning to limit the number of employees required to meet those customer needs.

Trends in Banking Employment

Bank Employee ReductionCitigroup released a report early in 2016 detailing recent employment declines in banks across the globe due to the automation of various tasks. For large banks, branches and the associated staff comprise approximately 65% of the total retail cost. The Citi report went on to say that, “Roughly 60-70% of retail banking employees are doing manual processing-driven jobs” that can be partially or entirely replaced via automation. Citi says that branch teller jobs have declined by 15% since 2007 and they expect the drop to continue, estimating that another 30% of bank jobs will be eliminated between 2015 and 2025. The graph labeled “At the Tipping Point of Full-Time Employee Reduction” details what this drop in full-time employees would look like compared to peak and recent levels. Per these predictions, U.S. bank staffing could lose another 800,000 jobs by 2025, while Europe may see steeper losses of 1.1 million jobs.

FinTech Investment

“FinTech investments have grown exponentially in recent years: $19 billion of investment in 2015 was up two-thirds from $12 billion in 2014 and from low single-digit billions of dollars per year earlier in the decade.” – Citi Global Perspectives and Solutions

The Rise of Mobile Banking Across the Globe

One of the leading causes for the cuts in bank branch jobs is the rise of mobile banking, which is currently the fastest growing channel in retail banking. A 2015 Accenture customer survey revealed that U.S. customers interact with their main bank an average of 17 times per month. Due to the proliferation of ATMs and internet/mobile banking, 15 of those times no longer involve direct human contact.

Major U.S. banks now have mobile apps that allow account holders to complete tasks they once used bank branches for, such as cashing checks and transferring money. The remarkable thing is, mobile banking still has low penetration, as less than 50% of developed market customers use mobile banking. While mobile banking will not be able to make physical branches completely obsolete in the near term, it will eventually replace a number of jobs as adoption to mobile service becomes more widespread.

Mobile money usage does not appear to be driven by wealth or technological sophistication. Many customers in developing markets have adopted mobile banking to overcome the lack of physical branches in their areas. For example, many African customers have embraced person-to-person money transfers on their smartphones. Africa’s largest bank, Standard Bank, reported a 99% increase in mobile transactions from 247 million in 2014 to 490 million in 2015. There were 515 million transactions completed via physical channels in 2015, while 947 million transactions took place on the internet. While there is a lot of room for continued adoption, technology is being embraced by developing countries as a way to quickly catch up to the rest of the world.

Europe Leading the Way on Branch Transformation

Bank Office LayoutWhile many still believe that customers will continue to go to their local branch offices for important life-changing events, such as their first home loan, most of the day-to-day transactional tasks will be automated. This means that the bank branch itself will transform to better fit the needs of future branch visitors, including reevaluating the types of employees that work there. These employees will specialize in advisory and consulting services, and the new branch layouts will reflect this, with more offices and meeting spaces added.

This change in branch configuration will be accompanied by a consolidation of total branches. Dutch and Nordic banks have decreased their total branch locations by about 50% already, leading by example for other developed countries in an effort to maximize profitability. Citi says that if “the banking system in Europe, Japan, and the U.S. operated with the same cost/income ration (sic) as the best-in-class Nordic region, it would remove $175 billion from their cost base (or 23%) and add 39% to the pre-tax profit of the banks in 2016.” U.S. banks have yet to match the branch cuts of their EU counterparts but are expected to do so as investments in fintech rapidly increase.

“I predict that the number of branches and people employed in the financial services sector may decline by as much as 50% over the next 10 years, and even in a less harsh scenario I expect a decline of at least 20%.” – Antony Jenkins, former CEO of Barclays

Bank Braches per Adult

Jobs at Risk

In 2014, Oxford University published research ranking the 100 jobs most at risk of being replaced by technology. The study estimated that 47% of U.S. jobs are at risk of being affected by automation and that those numbers are likely similar for other developed economies. Every job that appeared in this top 100 list had a probability of being replaced greater than or equal to 94%. Below are the top five banking-related jobs that are at risk of replacement, along with the probability of replacement:

Bank Jobs to be Replaced

McKinsey & Company says that the most automatable activities are those that include predictable physical work. Technology that is already developed, but not yet employed, could automate about 78% of the jobs in the US banking industry such as those listed above. Jobs that are less likely to be automated include responsibilities such as managing others, interacting with customers, and applying expertise to decision-making, planning, and creative tasks. Simply put, the more repetitive and predictable a task, the more likely the job is at risk.


The banking industry is already showing signs of massive technology adoption across the globe. This will change the way we interact with our banks, shifting bank employees’ tasks or eliminating their jobs altogether. Bank branches will transform their layouts, and less physical locations will be needed. No doubt, the recent spike in fintech investments will lead to cutting-edge technologies that will revolutionize the way we invest, transfer, and store our cash.