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Wells Fargo Prediction: American Banks Will Automate Away 200,000 Jobs By 2030 (gizmodo.com) 124

Posted by EditorDavid from the pulling-an-inside-job dept.
An anonymous reader quotes Gizmodo: Over the next decade, U.S. banks, which are investing $150 billion in technology annually, will use automation to eliminate 200,000 jobs, thus facilitating "the greatest transfer from labor to capital" in the industry's history. The call is coming from inside the house this time, too -- both the projection and the quote come from a recent Wells Fargo report, whose lead author, Mike Mayo, told the Financial Times that he expects the industry to shed 10 percent of all of its jobs. This, Mayo said, will lay the groundwork for, and I quote, "a golden age of banking efficiency." The job cuts are slated to hit front offices, call centers, and branches the hardest, where 20-30 percent of those roles will be on the chopping block. They will be replaced by better ATMs, automated chatbots, and software instruments that take advantage of big data and cloud computing to make investment decisions...

It is not rare that a report forecasts the imminent erosion of an industry's jobs picture, but it is a little rare that a prominent industry analyst for one of said industry's largest companies is so brazen -- even giddy -- about trumpeting the imminent loss of those jobs.... It is the confidence and enthusiasm for this schema that is key, as that is what will transform the report into a self-fulfilling prophecy. If the banks buy what Mayo and Wells Fargo are selling, then the report will contribute to an automated arms race between companies to cut staff and purchase enterprise financial software products that is already underway. This is how a lot of corporate automation unfolds.

As a result, we can expect to interact with even more customer service chatbots and automated call menus (whether they work well or not), to see more financial decisions turned over to algorithms, and a continued flood of software products to enter the banking industry. And Wells Fargo certainly won't be the only bank automating here: As the FT notes, Citigroup is planning to eliminate tens of thousands of call center workers, and Deutsche Bank expects to slash half its ~100,000-strong workforce.
Gizmodo argues the report's analysis is "filled with buzzwords and promises of harnessing big data and predictive algorithms that may or may not pan out to be as effective as currently thought."

Nonetheless, they write that the report's author "has been making the cable TV rounds, touting this incoming golden age of high-tech ultra-streamlined, automated banking, an age in which fleshy humanoid obstructions are finally smoothed out of the picture, making way for a purer, faster flow of capital from customer to banking executive."
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Wells Fargo Prediction: American Banks Will Automate Away 200,000 Jobs By 2030 More

Wells Fargo Prediction: American Banks Will Automate Away 200,000 Jobs By 2030

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  • Cheques in the 21st century (Score:4, Insightful)

    by flyingfsck ( 986395 ) on Monday October 07, 2019 @12:40AM (#59277310)
    Will Americans finally drop the use of cheques and do electronic funds transfers like in Europe?
    • We already have. I haven't seen a check in a couple years now.

      • Some things still demand cheques.

        Insurance payment, for instance. Will not accept cash in office, wont accept credit transfer. Demand cheque, or electronic bank transfer.

        While oddly, most other industries insist 'NO CHECKS"

        America is a strange place.

        • Re:Cheques in the 21st century (Score:5, Insightful)

          by Aristos Mazer ( 181252 ) on Monday October 07, 2019 @04:14AM (#59277600)
          Checks are still the easiest way to pay contractors for construction, landscaping, a lot of smaller auto body repairs... the irregular businesses that don't have bank accounts, so they can't easily establish relationships with credit card companies. They cash the checks and dole it out to employees. Such businesses are a major part of the US economy.
          • Comment removed based on user account deletion

            • the irregular businesses that don't have bank accounts, so they can't easily establish relationships with credit card companies

              There is no need to have a relationship with a CC Company. Here is how this works in Europe with IBAN.

              Say you are a consultant or contractor, not so much a company. (Although the same goes for any company).

              You open an account with any bank you desire. (free if you shop around for 10 minutes. Minimal fees if you don't take 10 minutes) If you want you can take a debit card. Most will, because that is easy. Credit cards is absolutely not a must. Now somebody need to pay you. They transfer the money from their bank account to your bank account. It will be with you in max 2 working days. Often faster. Done.

              If you have a monthly billing, you have two options: Do the payments manually or have it done automatically. e.g. some bills might vary, like electricity, so you get your bill, it will say what amount will be deducted and that will be done at the stated date.

              For rent you have a monthly recuring payment.

              And if you are not selfemployed, it still all works identical. I get my payments monthly from the company I work at. Directly on my bank account.

              What if you don't want to give out your banking details to your customer, or perhaps your customer enters the transfer details or amount incorrectly? Is there a fee for this service? The USA has a free service called the ACH network that allows direct bank-to-bank transfers, all you need is the bank account number. Many people don't want to give that number out.

          • Checks are still the easiest way to pay contractors for construction, landscaping, a lot of smaller auto body repairs...

            They're only the easiest because of the poor banking infrastructure in the USA.

            Here in the UK (and, indeed, most of the world) I can pay all those people above with an account number - it takes me 2 minutes to put them into the app/website/telephone banking, the money is paid to the business within minutes and they have immediate access to the funds.

            None of which is possible with cheques.

            • Most people here are still horrified at giving any of their information out for any reason.

              Then again there's also those who give it all away and get scammed because they think they found a free instant $5000 loan. "What's that? All you need is my username and password? You want me to send you $1000 in Visa gift cards? OK!"

              • Most people here are still horrified at giving any of their information out for any reason.

                You do realize that your personal checks have your account and routing numbers on them, right? The equivalent is all that's needed in the UK to transfer someone funds electronically, free of charge.

                • You do realize that your personal checks have your account and routing numbers on them, right?

                  I don't think that those people do... People are very dumb.

            • Re: (Score:3)

              by Kjella ( 173770 )

              You're confusing payment acceptance with bank accounts. Businesses can have a bank account (and receive money into it) without having to accept debit or credit cards.

              American businesses are trapped in a situation where taking plastic is funding a bunch of misc services and kickbacks causing the overhead to be 2-3% plus the risk of chargebacks. Because it's "free" to customers many people use it even though the costs are obviously passed to the consumers in the end. In Europe most countries have created some kind of national no-frills debit system like "EC-karte" in Germany or BankAxept here in Norway where transactions cost a few cent each and it's a debit transaction m

            • Re:Cheques in the 21st century (Score:4, Insightful)

              by Aristos Mazer ( 181252 ) on Monday October 07, 2019 @10:45AM (#59278560)

              Plus a legitimate business that doesn't have a bank account sounds rather suspicious to me.

              About 7% of US households don't have bank accounts in 2017 (US News & World Report), an all-time low. I couldn't find stats for businesses. But I'm aware of several problems:

              1. it's hard to trust a system of banking that screws you over regularly and treats you as a second class citizen, so there are plenty of minority-owned businesses to do all they can to avoid interactions with feds or banks.
              2. Then you have things like the marijuana businesses, legit within state lines but not legal crossing state lines, so most banks (who have to interact with the federal government) won't touch them.
              3. You also have the illegal immigrant workers -- the businesses are legit (i.e., you can trust them to do the job they're hired to do as much as any other business), but the owners and/or employees are not legally recognized.
              4. Last, you have the people who just flat want to keep government out of their business as much as possible, even when doing completely legal activities... it's a mindset somewhat common in parts of this country.

              In short, USA has lots of reasons for legitimate businesses to operate outside the banking system.

              • Comment removed based on user account deletion
                • The gov't is on the side of the people, just not *all* the people. It is a continuous work-in-progress to fix that, ever since the founding of the nation. We're losing ground at the moment, but the struggle continues.

              • A friend pays disability insurance claims, and specializes in behavioral health claims. It is not obvious, but I guess not surprising that an unusually high number of their BH claimants do not have bank accounts.

            • > In that example, the businesses already have a bank account.

              Nah. You have the check made out to the team leader. He/she goes to the bank, shows the check, shows ID, and gets cash. No account required.

              • > In that example, the businesses already have a bank account.
                Nah. You have the check made out to the team leader. He/she goes to the bank, shows the check, shows ID, and gets cash. No account required.

                Uhhhhh no. Almost all banks in my area will NOT cash a check unless you have an account there. They are starting to do that even if you wanted to break a large note into smaller denominations (i.e. busting a $100 bill into 5 $20 bills.)

                The first thing they ask you is "do you have an account with us? No? I'm sorry, we can't do that".

                • Keyword: almost. There are some banks that cater to the lower levels of the economy. They're right there with the payday lenders and pawn shops.

          • A business in Europe with no bank account is known as a scam ... ...if you don't have a bank account you can't do business

          • Checks are still the easiest way to pay contractors for construction, landscaping, a lot of smaller auto body repairs...

            This also reminds me.... having worked in banking..... Some people also like to write checks to pay contractors with... and as soon as the contractor leaves, call their bank to place a stop payment on the check.

            • Yeah. Assholes abound. The response tactic, if you suspect you have someone who is going to cheat you (or you've just been burned enough), is to accept payment and take the check to the bank around the corner while your team is still cleaning up and keeping the customer talking. The ones who will cheat you are usually paranoid about leaving you unobserved on their property, fearful you'll steal something. Use that to your advantage.

          • Re: (Score:2)

            by Miser ( 36591 )

            Yup. The USA is huge.

            You think some word-of-mouth contractor in the rural areas of the USA that is in high demand is going to futz around with EFT? Nope! Check or cash.

          • Re: (Score:2)

            by gweihir ( 88907 )

            There are _businesses_ without bank accounts in the US? Seriously?

        • Re: (Score:2)

          by PCM2 ( 4486 )

          Some things still demand cheques.

          And for those, major U.S. banks will actually print up a check and mail it for you, if the recipient won't accept funds electronically.

          I literally cannot remember the last time I wrote a check. Possibly once in the last five years, and who knows when the time before that was.

        • My insurance and all home utilities take debit card. My insurance agent does except cash but prefers not to (it's about not having large amounts of cash in the office or being able to make change).

          The plumbing/hvac that I do business with also started taking debit card a couple years ago. (the plumber had to call the office and have the secretary walk him through how to use the thing the last time I had work done)

        • "Some things still demand cheques. Insurance payment, for instance. Will not accept cash in office, wont accept credit transfer."

          I am a USAian and pay car insurance, home owners, and life insurance all via electronic transfer. I write about 1 check a year and its always for some one-off transaction like someone fixing my AC and they don't take credit cards.

      • Re:Cheques in the 21st century (Score:5, Insightful)

        by geekmux ( 1040042 ) on Monday October 07, 2019 @06:24AM (#59277768)

        We already have. I haven't seen a check in a couple years now.

        Never had a problem making online payments with dozens of vendors for years now. Suddenly my local water utility started charging a $3 fee for processing any online transaction.

        I send them a check every month out of spite now.

      • Go to the grocery store.

        I don't know if it's just my luck, but I get stuck behind some fucking asshole who insists on paying by check 1 out of every 3 or 4 times I go grocery shopping. These are, unfortunately, the same kind of folks who wait until they hear the total to start getting their checkbooks out.

        Stores need to nut up and ban checks. They waste so much of everyone's time. I know I'd choose to go to a store that banned checks.

      • a couple of years? I haven't used them in about 18 years... You're way behind.

    • Once automated off from their jobs they will, why would you need checks if you don't have income?

    • Re: (Score:2, Insightful)

      by Brett Buck ( 811747 )

      Doing things like Europeans was precisely what the USA was formed to prevent.

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by mspohr ( 589790 )

      When I lived in Switzerland 10 years ago, banks had no checks. Everything was done as an EFT. Got a bill... pay by direct bank transfer. Pay somebody... they send their bank details with the invoice and send them the money. Go to the store... debit card pay.
      No need for checks for anything.

      I can't believe that I still have to use checks for routine payments.

  • I Nominate Wells Fargo (Score:5, Insightful)

    by Marlin Schwanke ( 3574769 ) on Monday October 07, 2019 @12:51AM (#59277318)
    Would be nice if we could totally automate Wells Fargo right out of existence. But if there are going to be 200,000 jobs lost then I think the crooks that created all of those fraudulent customer accounts not long at Wells Fargo won't be missed.

  • They will be replaced by better ATMs, automated chatbots, and software instruments that take advantage of big data and cloud computing to make investment decisions...

    The only one in there that isn't overly optimistic is better ATMs, but only because ATMs are rather weak at the moment (as long as we're making wishes, can I request that they offer me a hot chocolate chip cookie at the end of every transaction? Automation should make it easy, right?)

    Chatbots can't do anything that number menus don't already do, and the ones I've used seem to be worse at it than a numbered menu.

    As for "big data and cloud computing to make investment decisions," the only thing I can par

    • That isn't a technological plan at all.

      It's a plan to automate the fraud. Then they can blame the machine for the "glitch".

    • A new unmanned Bank of America branch opened near me.

      It has three ATMs in the lobby, plus three additional rooms for videoconferencing.

      I assume the video conferencing is to talk to an intelligent avatar like Microsoft Clippy.

  • It's a given (Score:5, Interesting)

    by Powercntrl ( 458442 ) on Monday October 07, 2019 @01:00AM (#59277326) Homepage

    Automation is increasingly going to eliminate jobs as it progressively becomes cheaper (and sometimes better) at doing work previously done by humans. This much is obvious.

    The real question is how do we continue to have a functional society when large numbers of people no longer have any marketable skills? Paying people to sit on their ass undermines the value of fiat currency (its value is based on the power of the labor, goods, and services it can purchase - money used to purchase nothing is worth nothing), and it's unlikely people would be receptive to the idea of restricting progress (a la the Amish) or reducing the birth rate so there's less people competing for the jobs that remain (#ThanosHadAPoint, also might not be entirely good for an economy based on growth). An even less ideal option would be the government seizing the means of production, so that everyone suffers equally.

    Humanity has never had to deal with anything like this. Most technological advancements ended up creating new jobs to replace the ones which were lost to progress. We're in uncharted territory, and here be dragons.

    • Re:It's a given (Score:4, Insightful)

      by sjames ( 1099 ) on Monday October 07, 2019 @01:29AM (#59277408) Homepage Journal

      Our fiat currency seems able to survive wealthy people pulling in a rather large passive income and huge amounts of rent without difficulty.

    • Re:It's a given (Score:4, Informative)

      by phantomfive ( 622387 ) on Monday October 07, 2019 @02:17AM (#59277454) Journal

      The real question is how do we continue to have a functional society when large numbers of people no longer have any marketable skills?

      The current unemployment rate says we are not there yet, but what do we do when we get there?

      We party! (or in my case, have a programming party.) That is the goal, the ideal, to have the robots do all the work so we don't have to.

      • The robots do all the work. The robot owners get all the money.
        Sucks for everyone else though.
        • Once robots can build robots and robots become a commodity, then that won't be a problem.

          Robots aren't like housing, that there is a limited number of them. They will keep being made until the price/value drops.

          • Once robots can build robots and robots become a commodity, then that won't be a problem.

            Yes, assuming that happens before the unemployment rate gets beyond the tipping point. If technology can't catch up until 20 years after then, things will likely not be good.

            • If all it takes to get someone out of poverty is to have a robot build another robot for someone else that can provide enough labor to provide for them, then we'll have the easiest universe in existence to lift someone out of poverty. Currently you need to help a person acquire some kind of skill so that they can work. If a robot does that for you, all you need is to build them a robot.

              That doesn't necessarily solve all of their problems, but once they have one robot they aren't going to be destitute. I

              • Currently you need to help a person acquire some kind of skill so that they can work. If a robot does that for you, all you need is to build them a robot.

                What keeps the value of labor from becoming a race to the bottom if anyone's robot can do it, and if that happens, how do people continue to obtain food, shelter, electricity, transportation, etc.?

            • You are assuming a LOT in your predictions of dystopia.

      • That is the goal, the ideal, to have the robots do all the work so we don't have to.

        If the robots do all the work, you don't even have to be here, using up precious resources. You are kindly requested to stay outside the fenced area.

    • Re: (Score:2)

      by isorox ( 205688 )

      > ThanosHadAPoint

      Not really. He bought a given planet 40 years at most. Earth Population is 7.7b right now, it was have that in the 1970s.

    • Why not a UBI. Oh wait, thats socialism right...

  • There are too many 'bots all ready (Score:4, Insightful)

    by Malays Bowman ( 5436572 ) on Monday October 07, 2019 @01:03AM (#59277334)

    It really sucks when you need to talk to a HUMAN, and you have to go through a giant phone tree just to get jerked around and sent in circles. Companies have wised up, and disabled hitting "0" to get to a live human operator.

      Worse are the voice controlled system that try to be a fake human being. I end up cursing the thing out, saying some very NSFW sexual insults and mashing buttons which sometimes gets me to a human representative.

    gethuman.com is your friend, but I bet these companies look for sites like that so they can strengthen their phone fortresses. How dare you want to speak to a human, peon! We must fortify the walls, and make sure the flames under the big vats of boiling oil are constantly stoked in case one of you try to penetrate our defenses!

      It's this kind of hostile behavior on the part of companies that make people wish the ones running them get sent to the 7th circle of Hell in a hurry.

    • At WF, talking to humans isn't that great, either. I recently needed deposit some money for a friend who is in another country right now. Dealing with a human, I was not allowed to deposit cash without photo ID proving I was the account owner (the guy in another country).

      The human explained that there were lots of ways to depositing the money in my friend's account, as long as I did it somewhere else. Then I would be allowed to transfer it electronically. WF doesn't want to handle cash.

      • Crazy, I've never had trouble depositing money in someone else's account. For a while I paid rent by depositing it into my landlady's account.

      • Re: (Score:2)

        by isorox ( 205688 )

        Why wouldn't you deposit cash into your own bank account and transfer it, rather than acting like a money launderer?

        • The cash came from selling some of the friend's property that he no longer needs. It was his money, going into his account. He just wasn't around when the transactions took place.

          In the ancient past (more than a couple of iOS releases ago), this wasn't considered "money laundering".

          Now, anyone who handles cash in amounts larger than a latte at a certain coffee change is "acting like a money launderer"? Wouldn't the act of depositing that money in my account, THEN transferring it to his, be closer to "money

    • At WF, the voice recognition bot can still be readily coaxed into a human handoff if you cut her off and say "banker" twice.
    • "jerked around and sent in circles" - Swearing usually still works, even if it is a machine. When the system detects profanity, it will switch you to a supervisor. Try this: "Give me a fucking human being, right fucking now!"

    • Re: (Score:2)

      by hipp5 ( 1635263 )

      It really sucks when you need to talk to a HUMAN, and you have to go through a giant phone tree just to get jerked around and sent in circles.

      My cellular provider has a nice system that blends the best from the current capability of bots and that of humans. You go to their website and type into the chatbot the thing you're trying to do, it goes back-and-forth with you to confirm it knows what you wants, and then books a phone call from a staff member who has the appropriate role to handle your request. You then make sure you're available during the 15-minute window they give you.

      More efficient for me (no endless menu trees, no talking to the wron

  • Wells Fargo (Score:4, Funny)

    by sjames ( 1099 ) on Monday October 07, 2019 @01:32AM (#59277410) Homepage Journal

    Of course it's easy for Wells Fargo. They can replace the humans with simple script logic:

    If(expensive_service_requested) add_service() else add_service()

  • So they look at the recent progress in technologies and spawn "will do that" in "N years". It's linear thinking. We are definitely at the crossing of many very new technologies in the fields of quantum physics and AI (could be linked to QP) for instance. In one way or another these predictions are worthless because either the "work" as we know it will dramatically change (and may become unnecessary), or for other reasons that anyway render these predictions not any more likely than anything else.

  • So now they can blame "computer error" whenever they foreclose on a house or empty an account.

  • Comment removed (Score:3)

    by account_deleted ( 4530225 ) on Monday October 07, 2019 @02:29AM (#59277470)
    Comment removed based on user account deletion
    • "How does Wells Fargo still have CUSTOMERS" - There is a sucker born every minute.

    • Momentum.

      It's not just opening a new account and closing the old one, it's also updating everything associated with it; all those bills being automatically payed, debit card stored in favorite retail site, or whatever.

      People are lazy, and it's easy to not get around to stuff like this when what's there is, for the most part, working. Took me months to close my Capital One account, mostly because I was quite busy at the time and every day got home from work, was tired, and promised I would for real do that

    • Re:Forget workers... (Score:4, Interesting)

      by geek ( 5680 ) on Monday October 07, 2019 @12:02PM (#59278950)

      How does Wells Fargo still have CUSTOMERS at this point?!?

      I said the same thing about BofA. My wife had an account with them. I convinced her to close it. A few months later she noticed it had been reopened. She called to find out why and they told her there was interest they needed to deposit into her account so it was reopened. She took the 15 cents or whatever it was and closed it again. Few months later, she discovered it was again reopened. This time with 5 cents. She went in to close it in person and was told they couldn't close it and gave her an hour long diatribe. So she has this BofA account sitting there for the last 8 years with 5 cents in it that they wont let her close.

      She is technically a customer of BofA

  • Production or scarcity? (Score:3)

    by backslashdot ( 95548 ) on Monday October 07, 2019 @04:49AM (#59277644)

    Do we want more production? Or do we want more scarcity?

    • Obviously, more scarcity. Because that way everything is "fair." The demonic left (disclaimer: I never mean to imply by saying that that there is any other kind) insists that we all be equally poor, excepting themselves of course, rather than broadly but unequally wealthy.

  • the automation gets rid of jobs but it is also part of the general shift to completely monitor all traffic of money. At least all traffic of money for the less privileged, the ones being taxed highly in the graph in this article
    https://www.nytimes.com/intera... [nytimes.com]
    As for the wealthy, what is happening with their money, nobody has any idea. Except for the rare leaks of the Panama Papers.

  • Likely a win for the customer (Score:4, Interesting)

    by virtig01 ( 414328 ) on Monday October 07, 2019 @06:27AM (#59277778)

    Brokerages have been slashing commissions for years now. Trades used to be placed over the phone, to a human stock broker. The commission was $100+ and you were required to trade whole lots. After years of automation, commissions are now sub-$5 at all major brokers, and the experience is better to boot.

    Hopefully continued automation in banking will bring similar benefit. I've been online banking for over a decade now. Last year I opened an account at a traditional bank. What an awful experience. So much human interaction was required for something as simple as setting up direct deposit. It took days to complete. Maybe the biggest benefit to customers will be that poorly-run banks will be put out of their misery by the banks who automate well.

  • "... it is a little rare that a prominent industry analyst for one of said industry's largest companies is so brazen -- even giddy -- about trumpeting the imminent loss of those jobs."

    not rare at all, they don't care about loss of jobs, it will increase profit, which will make lots of (already very) rich people happy.
    that is all they care about.

  • They will be replaced by better ATMs,

    People already act as if they're transferring overseas money between their Cayman Island accounts and Cyprus. I can't wait for them use these "better" ATMs.

  • This, Mayo said, will lay the groundwork for, and I quote, "a golden age of banking efficiency."

    I sense some snark there ...

    If you can be replaced by a chatbot, then, well, the result is more efficient.

    We already went from vast rows of human tellers to ATMs decades ago. And that was more efficient too.

    I do feel badly for you if you lost your job, but let's at least be honest about things.

    • This is why it's important to upskill and always have a secondary set of skills to fall back on if one industry doesn't work out.
  • It takes either ignorance or arrogance or both to predict economic events 10 years in the future. We could easily face a major recession, a war or both. In any case 200K jobs in the US economy is about the noise level in the monthly jobs report.
  • The AI hasn't advanced much. The jobs getting cut were they were outsourced to Bangalore years ago. The ugly secret is that as automation has increased in the industry, fraud and defaults are also escalating. The banks didn't mind then, because of the sharp rise on the top line, but those ideas are not as profitable now. Increases in fees and more risk taking (to the point where Wells Fargo got fined for it) have produced enough backlash to the point where banks are just having so much difficulty differ

  • While I agree, that jobs will get tighter, I think this prediction is overstating things.

    I know someone that works as a bank teller, which is where you would expect these job losses to come from.

    However apart of one exception, most of the work being done isn't trivial stuff easily automated. This is likely management day dreaming.

    There is trivial stuff being done, almost exclusively by elderly people who don't use ATM or Online banking still. I guess one could argue that by 2030 most of them will have died

  • This, Mayo said, will lay the groundwork for, and I quote, "a golden age of accelerated wealth transfer to the top."

    FTFY.

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