National Australia Bank Ltd. announced plans to eliminate 4,000 jobs, or about 12 percent of its workforce, joining the ranks of global lenders cutting costs and shedding staff in the face of advancing technology.
“As we simplify, we automate processes and things move to digital channels, we will need less people,” National Australia Chief Executive Officer Andrew Thorburn told reporters in Sydney on Thursday. “The reshaping of the workforce is going to be significant.”
Rapid improvements in automation and a shift toward digital banking have upended the finance industry, with many traditional jobs disappearing. Sweden’s Nordea Bank AB last week announced 6,000 job cuts as it grapples with a digital transformation. Former Citigroup Inc. Chief Executive Officer Vikram Pandit said in September that about 30 percent of banking jobs could vanish in the next five years.
The Melbourne-based bank’s shares fell after its earnings report showed expenses increased and it flagged higher costs related to the job cuts, which are among the biggest announced by an Australian lender in recent history.
While banks have been automating workflows for decades, the process has sped up recently as technology becomes cheaper, labor costs continue to grow and consumer expectations around digital banking increase, said Kate Howitt, portfolio manager for Fidelity International Ltd.’s Australian Opportunities Fund. The financial services industry is “going through what manufacturing went through a couple of decades ago,” Howitt said. “The trend in employment numbers is clearly down for the foreseeable future.”
Thorburn is seeking to reduce expenses by more than A$1 billion ($770 million) over the next three years. At the same time, the bank will increase investment by A$1.5 billion, mostly on technology and process-automation designed to support its business lending division. It will also simplify its products and streamline internal systems.
No comments:
Post a Comment