SINGAPORE (BLOOMBERG) - Vikram Pandit, who ran US banking giant Citigroup during the financial crisis, said developments in technology could see some 30 per cent of banking jobs disappearing in the next five years.
Developments in artificial intelligence and robotics reduces the need for staff in some roles such as back-office functions, Pandit, 60, said on Wednesday (Sept 13) in an interview with Bloomberg Television in Singapore.
He's now chief executive officer of Orogen Group, an investment firm that he co-founded last year.
"Everything that happens with artificial intelligence, robotics and natural language - all of that is going to make processes easier," said Pandit, who was Citigroup's chief executive officer from 2007 to 2012. "It's going to change the back office."
While Pandit's forecast for job losses is in step with one made by Citigroup last year, his timeline is more aggressive. In a March 2016 report, the lender estimated a 30 per cent reduction between 2015 and 2025, mainly due to automation in retail banking. That would see full-time jobs drop by 770,000 in the US and by about 1 million in Europe, Citigroup said.
The banking industry is becoming "enormously competitive," Pandit said, adding that he foresees the emergence of "specialist providers" as well as consolidation in the industry. "I see a banking world going from large financial institutions to one that's a little bit more decentralized," he said.
Since leaving the firm, Pandit has invested in non-bank financial startups such as student-loan venture CommonBond Inc and home equity finance firm Point Digital Finance Inc. He formed New York-based Orogen last year with investment firm Atairos Group to acquire stakes in mature financial-services companies.