Many bank employees heading toward unemployment as AI takes over

“I have no idea what I’m supposed to do now.”

It’s a statement that could come from a lot of people confused and/or elbowed aside by changing times. As it happens, the speaker is a bank employee (Watanabe-san, let’s call him), and he speaks, says Shukan Gendai (June 24), for a great many colleagues nationwide who see themselves – rightly – as going the way of the bank teller.

Remember bank tellers? An extinct breed, rendered redundant by ATMs. Now it’s AI, artificial intelligence. Shukan Gendai doesn’t give a time frame, but as AI takes over more and more banking functions, the bank employee is clearly an endangered species.

Watanabe, now in his 40s, is a 20-year-plus employee of a major bank. His is a rather specialized skill. He’s a checker of sales contracts. His clients – or rather his bank’s clients – are mostly sales personnel whose contracts with their clients become official only after a minute check by a qualified person like Watanabe. Sometime this year he will lose his job to artificial intelligence. It’s not (for now) the end of his career, for his bank will reassign him – but to what? He doesn’t know yet, and fears having to start from scratch a new job for which his past work will have done nothing to prepare him. So much the worse if mastering a new technology is involved. Technology is not his strong suit.

Banks are going through a turbulent phase, Shukan Gendai explains. Technology is a big part of the story but not the whole of it. For most of banking history, banks earned the bulk of their profits by investing or lending depositors’ money. That’s viable in a rising economy, less so in a mature one like Japan’s. The negative interest policies of the Bank of Japan in cooperation with Prime Minister Shinzo Abe’s cheap money “Abenomics” economic reform package is the last straw. Banks small and large are seeing rapidly declining profits. One response has been a shift to investment trusts and insurance products. Another is personnel cuts.

“Fintech” – financial technology – is a key word. What it means to bank directors and their clients is the shift of financial expertise from humans to intelligent machines. What it means to people like Watanabe is a highly uncertain future.

Japan so far has not been a world fintech leader, but it’s catching up, and a stark fact Shukan Gendai relates regarding the American multinational finance company Goldman Sachs is the writing on the wall for Japan: a company division that in 2000 employed 600 stock traders now employs two.

Industrial and technological progress produces an unavoidable side-effect: people who fail to adapt. Horse-cab drivers, unable to compete with the automobile, fell by the wayside. Bank tellers were victims in the 1990s. AI threatens to spread that trauma wider than it’s ever been spread before. Bank employees of all sorts look to be on the front lines of a massive change. “The era of mass unemployment in the banking sector is right in front of our eyes,” warns Shukan Gendai.

© Japan Today