South African Banks Cut Jobs as Digital Banking Grows
Job Cuts
Over the past five years, several big South African banks have drastically slashed their staff numbers as more customers shift from traditional in-branch banking to digital platforms.
For example, Nedbank has cut its workforce by over 5,000 employees. That’s significant.
While some banks like Absa (1200 jobs) and Standard Bank (600 jobs) have also cut jobs the one bank that seems to be bucking the trend is FNB who have increased their workforce during this time.
Banking from your Phone
It seems that consumers are naturally making a shift towards increased digital interactions with their banks through Apps and web portals.
This is both because the banks are promoting them and it is just easier. Gone are the days when you needed cash or to head to the bank to print some sort of proof of banking letter. You can now use an app for most of these functions.
Standard Bank have reported a 30% rise in online transactions, reaching 1.5 billion transactions in the first half of the current financial year, while in-branch transactions have so far dropped by 13%. Similarly, Nedbank experienced a 20% jump in digital servicing volumes alongside a notable decrease in branch visits.
As a result, the banks are reacting and adapting, they’re further expanding their digital capabilities and shrinking their physical presence (like branches) to match this change in demand.
The increased move toward digital banking has brought a noticeable change in how services are delivered. Banks like Nedbank and Standard Bank report that digital transactions have shot up since the pandemic, while in-branch transactions continue to drop. This trend is also reflected in how they manage their physical branches, with Standard Bank making big changes and reducing its branch floor space across the country (and other banks following suit).
Banking Jobs and the AI Threat
The introduction of Artificial Intelligence (AI) in banking is expected to impact the job market even further.
According to some reports, over half of all banking jobs are at risk of automation using AI. This is because of the simple and repetitive nature of many banking tasks. And as AI systems become more and more sophisticated and able to handle more and more complex processes this looks to increase.
‘half of all banking jobs are at risk of automation using AI’
The one positive for jobs in the market us that as AI driven systems take over tasks traditionally done by people, there will be a growing demand for skilled workers in areas like software and AI development. The overall result will however mean fewer humans needed and the job cuts have already begun.
