Daily Management Review

People are no longer needed: banks are reducing staff


10/31/2017


Last week, Swedish bank Nordea Bank AB announced reduction of 10% of its staff, that is, 6 thousand employees.



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According to the bank’s head Casper von Koskull, the announced reduction is only the first signs before more large-scale layoffs throughout the banking industry against the background of the upcoming global restructuring. "If anyone says where we are or where the banks will be in 10 years, banks can easily have half of what they have today," said von Koskull in an interview with Bloomberg.

Trade unions reacted extremely aggressively to information about mass dismissals, calling such a step "shocking" and "cruel." The banking industry has already become much more compact than before the financial crisis. According to the estimates of the European Banking Federation, 14% less people are employed in the region's finance than before 2008. Currently, about 2.8 million people are working in banks in Europe.

In the third quarter, Nordea had about 31.5 thousand employees. Von Koskull says that Nordea's plans represent the future of the banking industry. Last week he told analysts in London that in the future only the most compact, most technologically advanced and efficient banks will be able to thrive.

"Companies living in the banking Middle Ages are already failing," he said.

Head of Nordea also noted that his bank is a pioneer in regard to how it looks at the fundamental changes and the upcoming industries.

"Perhaps, we are one of the first: this is not a reduction of expenses per se, it is a different approach to doing business where fewer people are needed," the bank's head stated.

It is worth noting that earlier a similar idea was expressed by UBS CEO Sergio Ermotti. He said that the development of technology in the future will allow the bank to reduce the number of employees by 30%.

The head of the Swiss bank said this in an interview with the magazine Bloomberg Markets. Ermotti also said that the coming decade will be affected by the development of technologies to the same extent that the emergence of new regulatory norms affected the current decade after the financial crisis of 2008.

source: bloomberg.com






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