(Hint: We won't all be replaced by robots.)
A new technology is on the scene and quickly gaining traction. It's more efficient and secure than the humans doing the same job, and it's more convenient for bank customers, too. Some industry pundits predict it will replace hundreds of thousands of jobs across the country in just a few years…
It's the mid-1970s and ATMs are becoming more popular and more prevalent.
Today, there are more tellers than there were before ATMs were invented, but their duties have expanded beyond simply handing out cash and accepting deposits. Post-ATM tellers are involved in customer service, sales, and—with the more recent Universal Banker model—opening accounts. Kathy Henrich, workforce expert and member of the grassroots organization Advancing AI Wisconsin, used this example to illustrate a key point when discussing the future of work in banking: new technology may replace some jobs, but with preparation and a strategic approach it ultimately benefits banks and their customers. "People's jobs will actually improve through this because they'll be able to focus on the parts of their jobs that are more valuable and human-focused," Henrich explained. Bankers will use data to make better recommendations to their customers and spend more time on customer-focused work. "Automation will free people up to do the things they've always wanted to do but haven't had the time for in the past because of routine tasks," she said.
In ten years, the world of work—and the world of banking—will look very different. In 25 years, it may be nearly unrecognizable. Machine learning, artificial intelligence (AI), automation, and other disruptive technologies are expected to replace 1.2 million people working in the banking industry by 2030.* However, the changes AI and disruptive tech will bring to the banking industry have the potential to improve and even create jobs. If bank leaders act now, they can set up their current and future employees for success in the new world of work.
A Look at What's Coming
The first step in preparing today's workforce for tomorrow's work is for leaders to look ahead at what's coming. The most important change on the horizon isn't a specific technology—it's the fact that the pace of change will continue to accelerate. According to Henrich, aging demographics and general workforce shortages are two of the biggest factors expediting the adoption of automation and AI technology. Especially in Wisconsin, where the unemployment rate is historically low, "the two go hand-in-hand," she said.
Disruptive technologies have the potential to transform the banking industry in several ways, but the two most likely are through the automation of repetitious or data-driven tasks and the augmentation of human work. Digital automation, in particular, is already impacting the business world in visible ways, and a 2017 report from Bain estimates U.S. companies could invest nearly $8 trillion in automation technologies by 2030. "Sometimes these trends surprise us by being already here," said David DeFazio, partner at StrategyCorps. "Automation is one of those."
Where it gets really interesting, DeFazio says, is when AI and automation companies start working together to provide a better experience for their customers. For example, Amazon has announced new business integrations between Alexa and business software such as Concur (expense management) and Salesforce (sales, CRM). "You'll be able to say 'Alexa, prepare my expense report for this month,' or 'Alexa, give me a customer report for my newest client,'" DeFazio explained. This integration of machine learning and digital automation will eliminate hours of manual research and data entry.
Laura Schmidt, strategic advisor to the superintendent of the New Berlin School District, thinks these advances will allow the financial services industry to focus more on customer service, for example by auto-filling information across different forms so customers aren't required to provide the same information over and over again. "It's streamlining processes with technology," she explained. Schmidt co-leads the Talent Pipeline Initiative within Advancing AI Wisconsin alongside Henrich.
As currently manual and time-intensive tasks become computers' work, we'll see dramatic changes across industries in the types of work that people do. According to Henrich, as artificial intelligence and automation transform the workforce, most jobs will either evolve into an augmented role (where machines provide insight for human decision-making) or require high dexterity and perception under changing conditions (e.g. skilled trades). "It's about augmentation, not displacement," she stressed. "More and more, the discussion is around augmentation where AI improves human capabilities."
"What you're doing now may not be the same thing you're doing in 10 years, but you might be producing much more with less work," Schmidt explained. "Some jobs may go away, but most will just change. Identifying those skillsets and developing them in the current and future workforce will be key."
Essential Skills for Tomorrow
As the focus of banking roles shift from transactional to advisory, the skills bank staff will need in order to be successful will evolve as well. Therefore, leadership must prepare their employees for more customer-centric duties. "Our customers want financial advice, but they don't always know how to ask for it," said DeFazio. That's where AI/machine learning apps like Acorn, Digit, and Penny come in. "These tools provide automatic saving and advice through data analysis," DeFazio explained. "The role of bank branch staff will evolve from giving advice to being agents of awareness of these tools." This transformation will only speed up as technology improves. "I see this evolving rather quickly," said DeFazio. "What we're going to need in branches is people wired for service who also have technology skills and the ability to pick the right tool for the right problem." For front-line staff, the lines between customer service, sales, and tech support will blur.
When forecasting the specific skillsets future workers will need in order to drive growth at their companies, Henrich says almost everyone will needs skills in three main categories: human skills, technical skills, and data skills. Human skills include complex problem-solving, creativity, and critical thinking. Technical skills involve understanding how computers work, but also how to deploy technology in a specific fashion to accomplish a particular task. Data skills are the ability to utilize new kinds of data in the workplace. In banking, data skills will be essential for positions involving customer service or security.
Most importantly, everyone in tomorrow's workforce will need to embrace a constant need for growth and development. "I'm a firm believer that everyone will have to commit to continual learning," said Henrich. "It's going to be a journey. It's a mindset shift from one of investing in education early on to get a job, to a new perspective of continual learning."
Get Ready Today
How will all of this impact the existing workforce—today's bankers? "The hard answer is, for some people who aren't willing to change this will be difficult," said Schmidt. "For others, it will be exciting and inspiring." She recommends leadership identify employees with a growth mindset and capitalize on it by leveraging their vast knowledge of the industry while implementing these new processes and tools. Schmidt says simply replacing the existing workforce with younger (and presumably more tech-savvy) workers is not a good solution because it erases the value of those years of experience. Instead, she advocates finding ways to "bring these different generations of workers with different skillsets together to build off of each other's strengths."
The key to success: bank leaders must prepare themselves in order to guide their institution and their staff through this transition. "If you're a leader at your bank and you're not aware of how things are changing, how can you instill that awareness in the people you lead?" DeFazio asked. "The first step to teach awareness is to become aware yourself. Be curious and experiment." He suggests downloading different savings apps or even opening accounts at competing institutions to see the way new tools might impact how your customers expect your products and services to work. "Leaders need to start thinking about the means by which they will start to educate their workers on a continual basis and invest in their workforce," Henrich agreed. "Plan for experiential learning opportunities and stretch assignments to help employees develop new skills."
Ultimately, the institutions and individual workers who will thrive in tomorrow's world of work are the ones who are paying attention to the coming changes and preparing for them today. To ignore what's coming is to risk being left behind. "One of the things that's concerning is that we know this is coming, but large segments of the existing workforce are not aware that if they don't do something different they'll become irrelevant," said Schmidt. "How can the company get their existing workforce ready so they're not in a position where they need to replace them? No one should have to be surprised."
Learn More About AI's Impact
- "AI is not simply the next in a line of new digital technologies. In the last century, perhaps only the motor car, the airplane, and the internet have matched its potential to transform the way we work and live." – Accenture, January 2018
- Bloomberg chart illustrating the sectors most and least likely to be automated.
- Quiz from PWC on where you fit in the future workforce
Seitz is WBA operations manager and senior writer.