Getting a job at a bank used to be seen as a wise career move and an easy path for anyone with a business degree. For those without degrees, a job as a bank teller still carried high status and decent pay. While these jobs required some business skills, they were mostly high-touch roles centered on customer service.
Today, your friendly teller has been replaced by an ATM, and your loan officer is an automated bot inside a smartphone app. Jobs in banking aren’t going to disappear any time soon, but they will change form. Instead of sitting at a desk at your local bank and relying on instinct to determine who gets a loan, you may find better opportunities in doing predictive analytics for a bank in Hong Kong.
The Bureau of Labor Statistics predicts that employment for bank tellers will fall by 8 percent by 2024, with 40,000 fewer positions open in the field as online banking and mobile applications take over many of the functions traditionally performed by human tellers. Loan officer positions, which typically require a bachelor’s degree, will see a very modest increase of about eight percent by 2024, although many of the loan officer’s duties are also being taken over by mobile apps and automated underwriting processes.
While there has been a decline in employment opportunities in the middle and back offices, there has also been a dramatic increase in infrastructure staff. Banks are seeing big structural changes and new operating models and are making big investments in emerging technologies.
Will there be banking jobs for fresh college graduates in the next few years? Yes, but they won’t look the way they traditionally have. The people skills required for traditional front-office banking will always be important, but those looking for banking careers would do well to walk in the door with experience in financial technology (fintech), knowledge of consumer trends in mobile computing, and some higher-level management skills. These are the qualities you’ll need if you want to help usher banks through the major structural changes that are imminent.
How Structural Changes Will Affect Banking Jobs
According to insights from Deloitte, ongoing structural changes in banking will bring new operating models, greater investments in emerging technologies, and a deeper engagement with the fintech ecosystem. End-to-end digitization will be the biggest technology priority for the banking industry, with the cloud being the primary tool for upgrading transactional capabilities. Meanwhile, big data and predictive analytics will play major roles in creating new finance and lending solutions.
The personal touch and discretion once enjoyed by loan officers is being replaced by a more accurate – but still personal – approach driven by analytics.
“The financial services industry is facing more challenges than ever,” Alan Zorfas, chief intelligence officer of predictive intelligence firm Motista, said in a press release. “Differentiation is narrowing, and even strong brands are finding it difficult to grow revenues. By understanding the emotions behind customer behavior, we have seen financial institutions are able to better serve their customers, grow revenues faster and more predictably, and roll out the type of products that suit their customer base best.”
What this means for employment in the banking sector is the skills candidates must bring to the table to succeed will be decidedly different from what they were in the past. People skills may take a back seat to a deep understanding of predictive analytics and big data. Front-line bank employees roles will be de-emphasized in favor of roles in infrastructure.
According to J.P. Morgan, there has been a dramatic increase in bank infrastructure costs recently. For example, in 2011, Deutsche Bank had 1.7 infrastructure staff members for every front-officer banker; in 2015, it had 2.4.
Regardless of whether you’re looking for a career on the front lines or in the back office, it may be beneficial to look at the industry from a global perspective. The banking industry is dominated by Europe, which has 43 percent of the total market share. Greater opportunities will emerge in the Asia Pacific market, which is seeing the most rapid growth as countries like China and India experience rising middle class populations.
Another important consideration for job seekers is that the cloud will take on increasing importance in several ways. Banking data centers will move to the cloud and be managed by third parties rather than in-house admins. Customers will increasingly see banking through the “as-a-service” lens, with online and mobile channels being more important than brick-and-mortar branches.
Like almost every other industry, the biggest concern for job seekers in banking isn’t that jobs are going overseas, but that they are being automated. The key to staying in the job market is understanding the nature of the employment shift. Lending decisions are less dependent on the discretion of knowledgeable loan officers and more dependent on computer programs. While loan officers won’t be replaced entirely, the nature of their work will change, and there will be a greater percentage of jobs on the back end rather than in the front office.
Dan Blacharski is a thought leader, advisor, industry observer, PR counsel to several internet startups, and author of the book Dotcloud Boom.