Technology advances are upending tens of thousands of jobs across the global financial sector, including at Canada’s big banks.
As global banks unveiled plans to slash tens of thousands of jobs this year, those in Canada held staffing levels fairly steady. But that doesn’t mean this country has been immune to the forces of automation and artificial intelligence that are reshaping banking around the world.
Beneath the surface, there are tectonic shifts under way in the nature of work and the kinds of skills Canada’s banks need. Experts predict that as many as a third of all Canadian bank employees face a substantial possibility that their jobs will change meaningfully – or in some cases, disappear altogether. In response, bank executives are trying to assuage fears of disruption by focusing on the potential to replace rote tasks with more productive and rewarding work.
But Canadian banks are also grappling with how to prepare employees for the transition.
“All jobs will be impacted, but [for] probably 30 per cent [of them] over the next 10 years, you’ll see a more significant impact," said Helena Gottschling, Royal Bank of Canada’s chief human-resources officer. “And what we’re really looking at is, what does that mean to our employees?”
New forms of automation, often driven by advances in artificial intelligence, could render scores of jobs built on repetitive tasks obsolete. An analyst at Wells Fargo Securities recently estimated that 200,000 U.S. banking jobs could be done away with over a decade, mostly in back offices, branches, call centres and corporate functions – though new hiring would offset some of those losses. And nearly two thirds operations leaders at banks surveyed by consulting company Accenture PLC last year expect to shed 10 to 30 per cent of middle- and back-office jobs in three years as new technologies take hold.
Aside from taking an occasional restructuring charge, however, banks in Canada have avoided the aggressive cuts undertaken by banks abroad. Global giant HSBC recently reportedly plans to axe 8,000 to 10,000 jobs in an effort to control costs – or about 4 per cent of its 238,000 employees. Other global giants, such as Britain-based Barclays PLC, Spain’s Banco Santander SA, and scandal-plagued Deutsche Bank AG, have also shed thousands of jobs.
Canadian banks employ about 275,000 people, according to the latest figures from the Canadian Bankers Association, which date back to 2017. That total was down just 1 per cent from about 280,000 in 2013, though gains in Ontario – where banks’ expanded technology operations are concentrated – mask declines in every other province.
But most bank executives agree that the pace of change in their ranks is getting faster. A recent report from consultants at McKinsey & Co. surmised that advances in robotic process automation, machine learning and artificial intelligence could reduce costs in areas from branches to back offices by 30 to 40 per cent, “and fundamentally change how work is done.”
Some of those changes will be apparent to customers. As transactions and day-to-day banking are increasingly done online, tellers and branch staff – who have been seen as endangered since the advent of automated teller machines in the 1960s – will be expected to give advice to clients, and to sell products and services.
But much of the upheaval will be behind the scenes. Manual tasks in line to be automated range from workers in call centres resetting customers’ passwords, to compliance staff vetting suspicious transactions for possible money laundering, to small armies of employees doing the voluminous paperwork that still underlies the financing of global trade.
Where there is disruption, however, banks also see huge opportunities. They expect to make employees more productive, and services to clients more personalized. Advisers in wealth management and relationship managers in commercial banking could spend more time with clients if time-consuming administrative and compliance work is automated. And with help from AI-powered tools, they should be able to better predict customers’ needs.
But while one bank might use the gains from that extra productivity to hire more bankers and expand its book of business, another could choose to do more with less and shed staff.
“It is much less a big-bang type of transformation," said Miklos Dietz, a senior partner in McKinsey’s financial services practice. “It’s much more a transformation that is already ongoing, it’s incremental, but it’s quite deep.”
One central challenge is how to redeploy the human capital displaced by automation. Canadian banks have ramped up retraining and skills programs in recent years, offering a range of options from in-house courses taken online to subsidies for classroom learning outside the bank.
RBC uses assessment tools offered by outside vendors to create reports for employees who may be affected by automation, gauging their ability to learn and propensity for certain types of work, to help them find training and chart new career paths. Toronto-Dominion Bank has signed up 45,000 staff to a self-serve learning platform called TD Thrive, which offers interactive courses, videos, Ted Talks and more topics ranging from digital fluency to how to be a risk manager. And HSBC provides training to staff around the world through HSBC University.
“The challenge, I think, is one of pace of change in the workplace and how we equip and invest in our people to have the agility to manage through that pace of change,” said Chris Hatton, chief operating officer for HSBC Canada. “The perishability of skills, the half-life of skills, I think, increases.”
Not everyone is expected to make the leap. Many roles jeopardized by technological advances are clerical in nature, while skills in high demand are in areas such as data analytics, software engineering and agile project management. But to implement new technology, banks need new teams of people to deploy, maintain and explain it. As AI-enabled machines make decisions about whether to extend credit, for example, banks need people trained to explain the reasoning behind those decisions to clients or regulators.
“The opportunity to retrain, redeploy, reskill is certainly there," said Robert Vokes, managing director of financial services for Accenture in Canada. “In some cases … it will be difficult, and certainly in some individual cases it will be close to impossible. But in aggregate, it’s not."