The coronavirus pandemic has strengthened the concept, making it a new normal.
- TSB Bank cited reduced customer visit to its branches during the coronavirus pandemic as a reason to cut the role of cashiers in its branches, risking more than 900 jobs.
- TSB asked the affected staff to re-train for roles such as assisting the customers in opening bank accounts and using bank’s digital services, among others.
- The coronavirus pandemic has re-emphasised the importance of technology for banking operations.
Technology has changed the way customers connect with their money and the banks, leading to increased digitalisation. The banks need to focus on improving their profits to save jobs. In its latest announcement, TSB (Trustee Savings Bank) Bank plc, said that it would cut the role of cashiers in its branches, risking more than 900 jobs. TSB highlighted that majority of customers did not visit the bank branches during the pandemic and asked the affected employees to retrain for complex roles, including assisting the customers in using the bank’s digital services. We present a discussion on the growing usage of technology by the banking industry and also bring key highlights of the announcement made by TSB.
TSB decides to phase out roles of cashiers, risking more than 900 jobs
TSB (Trustee Savings Bank) Bank plc, a part of the Spanish banking group Sabadell, announced its plans to cut the role of cashiers in its branches. The bank cited a sharp decline in the number of customers visiting the bank branches during the coronavirus pandemic as a reason for its decision.
The latest move would affect a total of 929 staffs whose jobs would be phased out in early 2021.TSB said that it provided the employees with a choice as it plans to phase out the non-specialist roles. The TBU union, only independent union for TSB staff, informed that as per the bank’s staff memorandum, the affected employees were asked to retrain or opt for a change in their roles, apart from going for voluntary redundancy. The bank union stressed that TSB was already under financial constraints and has presented the coronavirus pandemic as a trigger to cut the roles of the cashiers. It is not easy to predict at this point if the customers would start visiting the bank branches once the pandemic recedes.
Outlining the details on retraining, the TSB staff memorandum mentioned that TSB motivated the affected workforce to be prepared for roles such as assisting the customers in opening bank accounts, besides helping them to use bank’s digital services. TSB said that there would be a decline in the number of its customers, who would visit the branches for basic transaction-related works.
During the coronavirus pandemic, several banks have suffered losses due to loss from loans. As a strategy to continue with the business and recover from the crisis, many banks have adopted various cost-cutting measures, including job cuts. In July 2020, Sabadell said that it was planning to increase cost-cutting measures at its British subsidiary, TSB, as it registered a loss of £57.5 million for the first half of 2020.
TSB is a retail bank that provides full-service banking to more than five million customers. It operates on a modern banking platform and services its customers through digital channels, over the phone, and in branches spread across the UK.
Growing usage of technology in the banking sector
During the pandemic, customers have used their bank’s digital services for day-to day-needs, making it a new normal for times to come. The new normal for the banking sector includes how banks conduct their operations, need for employees to learn new skills, brands perception, and use of technology as a facilitator. The lockdown restrictions have been lifted with strict guidelines on social distancing norms amid the fears of catching an infection while moving in a closed and crowded environment. Many experts believe that such concerns would remain even if the pandemic subsides. These reasons necessitate an increased need for technological interventions to facilitate a smooth continuation of essential services like banking. We look at some top technology trends that many banks have been using even before the pandemic, need for strengthening them, and new ones that could be useful in 2020 and beyond.
(Source: International Data Corporation)
Artificial intelligence makes banking smarter: Artificial intelligence (AI) has already made inroads into the banks. Estimates made by International Data Corporation (IDC) a market intelligence company, suggest that the 2019’s investment of £3.8 billion by the global banking industry to implement AI systems is projected to reach £74.9 billion by 2023. Besides helping to comprehend customer’s needs, AI-based systems help in offering customised and personalised services. Chatbots and robotic advisers are used to automate several customer service components, assisting in increased satisfaction levels, and quickly providing solutions for their queries, besides helping in customer retention. AI is also used to analyse big data to leverage critical insights for business growth. Machine learning examines data for finding trends at each customer touchpoint. Banks apply these trends for providing a better experience, apart from using them for saving costs.
Cloud computing helps to save costs: Instead of investing in one’s own infrastructure, cloud computing increases flexibility and help in the easier analysis of data. Cloud service providers increasingly focus on security aspects.
Technology-driven new branch formats: Banks are creating a leaner set up where remote tellers provide help to the customers by using assisted-service terminals and video linking facilities.
Cybersecurity is a priority: Cybersecurity has gained importance in the era of digitisation and cashless transactions, and banks analyse data to find out patterns of doubtful activities. AI is used for fraud detection and real time risk management.
All technology-led operations against maintaining physical branches
Some banking industry experts present the argument that banks investing in innovative technologies would stay ahead of their competitors. This is advocated strongly with an increased number of banks shutting their doors since 2015 including some leading names like Royal Bank of Scotland, HSBC, Barclays, and Lloyds Banking Group.
The consumer group Which? said that the race for a digital-only transition of banks must take along its various customers and keep running the vital financial services for them. In case of the elderly population, which is considered less tech-savvy, reliance on physical branches is a crucial aspect. The rise in cyber crimes in the digital era is another vital point to be taken care of.
Other section of experts believes that the future of banking lies in having the right mix of technology-led operations and physical bank branches with human interactions.
Customers have embraced mobile and digital banking at a fast pace in recent times, and this speed was accelerated during the coronavirus pandemic. While it is essential to have a bank branch at a convenient location like markets, shopping malls, office, and other premises like educational institutions to meet the various needs of the customers; however, a fair competition would be to provide customers with an opportunity to bank anytime and anywhere with equal ease and confidence. And the solution lies in investing both in expanding bank branches and technology to make banking easier and safer.
There are little doubts that technology would prove to be a game-changer for banks who adopt innovative technologies at the correct time and keep them ahead of their competitors. The technology could potentially help in retaining the existing customers, servicing them better, and acquiring additional customers. The employees should be trained on properly using the operation related technologies as well as guide customers on the technologies to be used at their end. Considered as a necessary evil for the times that we live in, the effectiveness of technology needs to be monitored and reviewed regularly to achieve desired results.