Dutch bank ING, has announced it’s plans to save €900 million per year, by replacing 5,800 people with machines and moving 1,200 jobs as part of a ‘digital transformation’.
The invstment will cost €800 million over the next five years, with the money being spent on technology that will standardize its infrastructure, data, and other processes into “one digital banking platform.”
The majority of job losses will be full-time staff in Belgium and the Netherlands, where risk management, finance, HR, and IT functions will be centralized. In Belgium, the number of ING branches will be cut to 650, from 1,200.
The rough bill for replacing people with machines will run to the equivalent of more than $2 billion.
This has understandably annoyed unions, as ING received a €10-billion government bailout in 2008 to keep it afloat.
ING believes that its customers expect the same level of service from their bank as they get from the likes of Netflix, Facebook, or Spotify, says Raymond Vermeulen, a spokesperson for the bank; “We have to adapt. The consequence is that we can do it with less people.”
Some studies suggest that around 10% of jobs
in rich countries are at risk of automation. The more rote the tasks, the more susceptible they are to robot labor—a widely cited study
puts banking jobs like teller and loan officer at better than 90% odds of “computerization.” Upstart fintech companies are now launching banks that deliver services almost exclusively via mobile apps, bypassing all the legacy costs of large workforces and outdated technology.
Indeed, ING is far from alone in launching a costly technical transformation.
ING’s plans follows last weeks announcement by Germany’s Commerzbank that by 2020 it will digitalize and automate
80% of its processes, cutting 9,600 full-time jobs, at a cost of €1.1 billion, as a result. Meanwhile, RBS is about to launch an online, AI-powered customer-service system
(paywall), which can apparently read a customer’s moods and respond accordingly. It also, presumably, never takes breaks and doesn’t ask for any perks.