3 November 2017
Automation and fin tech loom as the biggest job killers in the finance sector. Photo: Michael Ciaglo
In the eighties it was automatic teller machines. In the nineties it was mass branch closures. In the naughties, it was offshoring. Now, automation and fintech loom as the great finance sector job-killers, with fears that more jobs could follow the 6000 in cuts announced by National Australia Bank on Thursday.
For bank employees, it is a time of “massive upheaval and change” in the words of the Finance Sector Union, which says it has real concerns that more large-scale job losses are coming. NAB’s 6000 job cuts, to come over the next three years, amount to about 18 per cent of its full-time equivalent workforce – the most dramatic change to employee numbers publicly announced by a major bank in recent years
National Australia Bank announces it will cut 6000 jobs over the next three years, while hiring 2000 new people with digital skills.
“The finance industry is really at a crossroads,” says FSU national secretary Julia Angrisano, who wants more details of the bank’s career transition program, to be called “The Bridge”, and the 2000 new jobs NAB says it will create as it “reshapes” its workforce with a focus on more automated processes.
NAB chief executive Andrew Thorburn says that, where possible, the bank will retrain staff with the “aptitude and commitment” to do so, and expects that some of the job losses will come from natural attrition.
For the rest of the economy, it’s a reminder that few sectors, income brackets or skill levels will be immune from the changes brought on by automation and digital disruption. Economist Saul Eslake points to a widely-quoted Oxford University study suggesting that 47 per cent of US employees are working in jobs that could be done by computers or algorithms within between 10 and 20 years, with the impact to be felt in both high and low income jobs. In Australia, a 2015 study from the Office of the Chief Economist found that 44 per cent of Australian jobs were highly susceptible to automation.
But it is bank workers who are at the frontline of this change; the 2015 study gave bank workers the second-highest automation score of any occupation, lagging only behind telemarketers.
To help workers cope with this period of “intense digital disruption”, the FSU has called for a sector-wide industry plan with contributions from the banks, the union and the government, and a skills fund for workers.
“We are at the point where we could leave the employees behind,” Angrisano says. “The way we treat staff during this period will reflect on the industry… we need to have the industry step up and manage this in a way they haven’t managed it previously.”
There is cause for hope for affected workers. Eslake says that the job losses resulting from previous technological upheavals have quickly been “more than offset” by new jobs and productivity gains created by that same technology.
His optimism is echoed by David Tuffley, senior lecturer in applied ethics and sociotechnical studies at Griffith University. He says while the 6000 figure announced by NAB seems “alarmingly” high, “the trend that we have seen with other technology is that the technology itself generates more and more employment in its own right… we don’t know what these new jobs are going to be, but we do know that they will come”.
Eslake suggests there may be a role for the government to subsidise the retraining of workers who lose their jobs to automation, and he also calls for a boost to income support for people who lose their jobs.
But he says we also need to rethink why some jobs – such as those in manufacturing – are viewed as inherently more “noble” and worthy of intervention than those in the services sector. “Nine hundred people lost their jobs at Holden and there’s an enormous amount of wailing and gnashing of teeth compared to 6000 jobs at the bank,” he says.
We are at the point where we could leave the employees behind. – Julia Angrisano, Finance Sector Union
“We seem to think that manufacturing jobs are far more worthy of being saved than jobs in services.”