Hongkong and Shanghai Banking Corporation (HSBC) – Europe’s largest bank has revealed in its recent earning call, it plans to drop 35,000 jobs by the end of 2022 and invest more in digital systems.
The banking sector continues to suffer drastic layoffs as the global economic outlook remains uncertain. HSBC becomes the latest financial institution reported to be set for cutting a massive amount of workers after already firing thousands of people just a few weeks ago.
According to an HSBC executive, the bank looks to trim its staff number and branches in the next three years, as it moves towards fully operational use of technology. Noel Quinn – Group CEO remarked:
“In Retail Banking, we will expand our products offering and increase our investment in digital. We’ll refocus our Retail Banking presence to serve globally mobile clients, reducing our branch network in the US by around 30%. […] We will also continue to invest in the digital systems and solutions that will improve the service we offer our clients.”
Mr Quinn warned there would be “meaningful” workforce reductions in the bank’s home market of the United Kingdom. Other cuts to jobs and costs will come from a simplification of the bank’s organizational structure and from the effect of technology and digitization on the business.
To this effect, the bank had in 2017 setup an advisory panel to weigh methods to integrate emerging technologies such as blockchain, artificial intelligence and biometrics into its banking and business model.
The CEO further attributed the cut to economic factors such as Brexit, US-China trade wars and the ongoing coronavirus epidemic in Asia.
As part its digital transformation agenda, the bank announced in November it would implement a new blockchain-based custody platform called Digital Vault by March 2020.
HSBC plans to move its $20 billion worth of assets to the blockchain platform, as well as scrap paper-based records of private placements to give way for digitization, reduce cost and ensure speed in its operations.
The bank just as its other counterparts foresee an overhaul of traditional financial processes.
Artificial intelligence (AI), blockchain technology, and robotics are top on the list of tech advancements to take over human jobs.
The utility of these technologies in finance (accounting), transaction security, and more are set to increase this decade. Analysts advise most professionals in the banking industry to seek alternative skill sets to keep up with the tech evolution.
Asides replacing man-power, these technologies offer speed, efficiency and save cost of employing human labour.
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