Banks in Europe closed thousands of branches and cut staff numbers by tens of thousands last year as customers increasingly use technology to do their banking.
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Cost-cutting, changing customer habits and technology are combining to accelerate the reduction of bank workforces and branch networks. This process began following the financial service crash 10 years ago.
Figures from the European Banking Federation (EBF), which include the UK, revealed more than 9,000 bank branches were closed in 2016, and more than 50,000 people working at those banks lost their jobs.
While the decline has been going on for about a decade since the financial crisis began, it is accelerating due to the rapid adoption of technology such as mobile apps and automation software.
Today, in the EU, there are 189,270 retail bank branches – down from 238,000 in 2008. Over the same period the workforce has fallen from 3.26 million in 2008 to 2.80 million last year.
Banks in the UK have cut thousands of jobs and closed high street branches since the financial crash. The Royal Bank of Scotland and Lloyds Banking Group have recently made cuts. The banks have consistently blamed many of the cuts on the changing habits of customers and their preference for digital channels.
Technology can do the jobs of many thousands of back-office workers and even some front-end staff. The same goes for branches, with many of the services now available online or via mobile. For example, today there are banks that do not have any branches and only use a mobile app to serve customers.
In the UK, the British Banking Association (BBA) – an EBF member – said in its recent Way we bank report that there were 11 million logins to banking apps every day in 2016, and 4.3 million logins to internet banking via bank websites.
Meanwhile, development technology such as automation and software robots means banks need fewer staff in the back office, with processing and even customer services automated.
A report from US banking group Citigroup last year predicted that more than a third of banking jobs in Europe would disappear over the next decade as new financial services technologies emerge. The report said that over 60% of retail banking employees were doing manual processing jobs.