Banks hit by digital change shed jobs, close branches

One of Sweden's main financial-worker unions says the job cuts announced in October by Nordea Bank are just the beginning of a transformation that is about to hit the whole industry as more financial firms come to rely on digital solutions.

The Nordic region's biggest bank has yet to reveal to its staff who exactly will be affected by the cuts. Nordea has just said it intends to get rid of 4,000 full-time employees and 2,000 consultants.

Those announcements will be made internally and department by department at regular intervals over the coming years, the bank has said.

At Sweden's Civilekonomerna union, head of negotiation Mikael Andersson says employees at other banks should gird for similar developments.

"Nordea, with its announced job cuts, is no exception," Andersson said in a phone interview on Thursday.

"This development with rationalisations will also happen at other banks, as it's general."

Nordea chief executive officer Casper von Koskull has gone so far as to say the financial industry may have half as many workers a decade from now as it adjusts to a digital revolution that will make several human functions redundant.

The technological transition hitting the financial industry makes it inevitable that fewer humans will be needed, and Andersson says "Nordea's job-cut announcement did not come as a surprise to us."

"The whole sector is sitting in the same structural boat," he said. "What Nordea talks about are costs for technology development of, for example, savings solutions and partly robotised services, and digitisation. These developments are coming across the banking and financing sector."

Separately, Royal Bank of Scotland Group (RBS) said it will close 259 more branches across Britain in its latest round of cuts as customers shift to online banking.

Outlets under the NatWest and Royal Bank of Scotland (RBS) brands will close in the middle of next year, resulting in about 680 job cuts, the company said yesterday.

RBS said it will use the savings to invest in its smartphone offering, which has seen mobile transactions rise more than 70 per cent since 2014.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 02, 2017, with the headline 'Banks hit by digital change shed jobs, close branches'. Print Edition | Subscribe