
Robots to Cut 200k U.S. Bank Jobs in Next Decade, Study Says - hhs
https://www.bloomberg.com/news/articles/2019-10-02/robots-to-cut-200-000-u-s-bank-jobs-in-next-decade-study-says
======
dawg-
A few years ago my bank had a mini-branch in my local chain grocery store.
They had a counter and some tellers working behind it. I went to it really
often because I was being paid in cash at the time waiting tables. The
employees were super nice, they all seemed like they were friends, and I kind
of became buddies with them over my time of being a regular customer. Not all
bank tellers are pleasant customer service people, but this group just had a
good vibe I guess.

One day I try go to the bank and the counter was ripped out and drywalled
over, and in its place is a giant ATM machine. It's like an ATM machine on
steroids that can do anything with your account. And if you had issues there
was a screen on it that would connect you to a call center in Bangladesh or
wherever.

Some corporate bank employee was posted next to the machine to explain the
change to people who had questions. When I walked up a group of people were
standing around listening to him talk, they looked ready to pull out the
pitchforks. He assured us that all of the tellers were still employed, they
were just working "behind the scenes". I didn't buy that at all, and neither
did anyone else.

I continued to use the machine to deposit my cash, but it really sucked. I
mean the machine worked absolutely fine. But it sucked to imagine how those
tellers felt to be replaced by it.

Now that I don't get paid in cash, I don't even go to a physical bank at all.
I deposit checks on my phone in the rare occasion I need to do that.

I'm still not sure how to feel about this. I want to hate it but it feels a
little irrational. Maybe all of those tellers went to a coding bootcamp and
now make triple their salary designing the ATM machines? Seems like that's how
the story is supposed to go. But probably not. Nothing I can do about it
anyway.

~~~
softwaredoug
Honestly if simple banking is handled by automation, isn’t there room for
differentiation for more “human” banking that empowers people to understand
and use more complex financial instruments?

~~~
dawg-
I don't know. Maybe. I am just talking about the experience of seeing a
person's face every day, looking them in the eye, making small talk,
interacting with other customers in the bank. That kind of every day stuff has
value.

I think we can mourn our losses while also looking forward to the new
opportunities created. It doesn't have to be all good or all bad.

Anyway, I'm not sure I completely understand your comment. Are human bank
tellers impeding people from using "more complex financial instruments"?

~~~
ikeyany
> I am just talking about the experience of seeing a person's face every day,
> looking them in the eye, making small talk, interacting with other customers
> in the bank. That kind of every day stuff has value.

Yes, but this value is clearly less than the value provided by automated
convenience. Isn't this why you don't go to a physical bank at all?

It seems like the problem is that the people who are "automated away" should
be able to get by somehow, even if that means entering retraining or adding a
safety net for those unable to transition somehow.

I'm not sure how many viable solutions of substance we'll come us with,
considering our day job is programming computers, not crunching intentionally
complex economic policy.

------
Merrill
It's an ongoing process. 10s of thousands of jobs were taken out the last two
decades by changes to check processing. Check imaging and clearing by image
transmission or conversion to ACH, along with more payments being made by
credit cards, resulted in shutting down rather large back end operations that
were coding, sorting, repairing, transporting, returning, re-presenting, and
including paper checks in customer's statements. A check that processed
without any irregularities didn't cost much. However, any errors or unusual
processing that a check required cost a lot.

What is needed to really reduce costs is a payment system that eliminates
error and irregularities, or which uses AI to handle them.

~~~
larzang
> What is needed to really reduce costs is a payment system that eliminates
> error and irregularities, or which uses AI to handle them.

Perhaps some kind of... clearing house, which could be automated?

In the US we have a dozen startups for you to send money to your friends. In
most of the world you just do a bank transfer.

I pay my rent and utilities with ACH, but I know people who still don't have
that option and are stuck in the dark ages of checks or credit cards with
processing fees.

I have accounts with multiple credit unions, and one doesn't permit online ACH
transfers and another takes 3+ days to do it. I'm currently trying to
consolidate those accounts but even that's a huge hassle. It's nearly 2020 and
the form the payroll company my employer uses wants a voided check from me to
change where my direct deposits go! I don't have checks and haven't written a
personal check in probably 15 years.

We keep scratching our heads looking for that magic future tech solution to
our problems (AI! AI for everything!) when we actually just need to fix
adoption of the freaking 45 year old standardized solutions right in front of
us.

Checks have always been an almost entirely American aberration and a bad
solution on all sides. It took us almost 15 years after Europe to adopt chip
cards, and we're still swiping in places and almost nobody requires a pin for
security. NFC adoption isn't great either outside affluent areas. We're not
lacking new financial solutions, we're lacking proper adoption of the
solutions we already have and the rest of the world is happy to use.

~~~
Merrill
US payments is a very complex system - there are around 4900 banks and a
similarly large number of non-bank players. Managing change is really hard.

Not everyone wants a change. One person's costs are another person's revenues.
There are also a lot of managers managing organizations that process fraud,
errors, and other irregularities. Costs don't matter if you can charge enough
in fees and interest.

In the case of chip cards, the US wasn't about to pay for the French smartcard
patents. In general, financial technology is a patent thicket and its best to
wait 20 years before implementing new ideas unless you have really positive
financial case and can be sure you have the IP locked down.

~~~
simonh
I find it really hard to believe that the costs of those patents would have
been higher, to the US economy as a whole and thus citizens in general, than
the costs of sticking to the old inefficient, manual systems for 15 to 20
years. I smell politics.

I suspect there's also the old argument that standardisation takes regulation,
and regulation is evil. Government should stay out of this (oh, btw,
Government - can you just pay the next tranche of subsidies directly into the
executive bonus account. Thanks!).

~~~
nybble41
If government had stayed out of it then the cost of patents would not be a
factor; the improved system could have been universally adopted and
standardized as quickly as it could be reverse-engineered.

~~~
Merrill
Standards actually help somewhat, since standards committees generally require
that participants disclose their patents that are essential to practice of the
standard and pledge to license them on "fair, reasonable, and non-
discriminatory" basis. Of course, there is debate on what is actually FRAND.
And other parties that are not members of the standards committee may claim
that they own patents essential to the standard. But government recognized
standards are better than nothing.

------
pnongrata
I think a more accurate headline would be "Banks to cut 200k jobs over
Robots".

Robots don't take jobs. Managers replace workers.

~~~
mac01021
That's already how everyone is reading the existing headline, though. It's not
like anyone is being misled (I don't think)

~~~
pnongrata
It's important to say it as it is. People tend to treat it as a 'natural'
thing, instead of a business decision to cut costs.

~~~
Nasrudith
With competition it is a red queen's race unfortunately. It is natural in an
emergent sense even though the circumstances are synthetic. If they don't
someone else will and even if they held existing jobs sancrosanct they will be
displaced by a new party who doesn't have existing jobs to protect.

~~~
dropit_sphere
We don't get to choose whether we're in the race or not, but we _do_ get to
choose how we run it. I get the "these are forces at work, not humans"
argument, but I think it underestimates the solution space available to the
humans in the scenario (to be fair, they probably do too).

------
anteatersa
There were probably articles very similar to this written when ATM's first
bengan rolling out in the 60/70s.

~~~
prepend
And they were right. ATMs displaced tons of jobs. Banks used humans for other
jobs and that’s why banking industry employment kept going up even with all
these robots doing, better, the job previously done by humans.

~~~
tyri_kai_psomi
> all these robots doing, better, the job previously done by humans.

I don't know if you use ATM's a ton, but when it's the _only_ option you have
for interacting with your bank, it's pretty terrible, because your options for
if something goes wrong is to call a number and get redirected to some general
call center in probably some other country and wait while some minimally paid
chap who couldn't care less about your problems follows a script and then when
they can't figure it out, tell you they will file a ticket and get back to you
in 3-7 business days.

I agree software and robots can do the job better with the caveat that you are
using the well trodden majority use case. The moment something goes wrong
(software bug, does the wrong thing, etc), or you are trying to do something
slightly different, good luck.

~~~
tialaramex
Get a better bank. This comes up too often on HN. Prioritise customer service.
Don't pick the bank that offers slightly better rates but gives you the run
around on every little thing, especially for day-to-day services.

My bank (First Direct) picks up only barely after the ringing tone starts, and
the person you're talking to is an expert. They have no branches, so
everything must be solved on a phone call (or you can use their web site of
course). Nobody needs or wants branches, especially branches that are only
open when you've got better things to do.

------
drcode
Or, maybe there are just lots of inefficiencies in the banking sector, and
more efficient/affordable banking is good for almost everybody, especially for
the demographics of people who are currently underbanked.

~~~
wickedsickeune
You honestly believe that lower banking costs will transfer to clients?

~~~
SonOfKyuss
Yes. We’re all used to free checking now, but it wasn’t always that way. No
fee credit cards with cash back are also a result of competition and lower
costs.

~~~
Clubber
I don't think free checking is a thing anymore, unless you are grandfathered
in.

~~~
romdev
Shop around - it's a competitive market. Many checking accounts with an
initial deposit of less than $1000 or confirmed direct deposit are free and
have no minimum balance. Some (TD for example) will even pay $150 - $300 to
open an account after a few direct deposits.

------
SteveSmith16384
And I bet most of us will still be working a 5 day week, despite all the
savings from automation.

~~~
sak5sk
This doesn't have to be the case. It is up to new business owners to decide
how much their employees should work, what they should make and how often they
should take vacations. Anyone can set an example at any time. As far as I know
there is nothing to stop anyone from setting their own standards for fewer
working days, shorter days, better pay, more vacations.

~~~
adamsea
It’s also up to the law

~~~
sak5sk
Is there a law that says I can't pay you a full time's salary for 20 hours a
week instead of 40?

~~~
bluGill
The law of competition. Assuming that your employees are less productive
overall on a 20 hour week, the competition paying get a 40 hour week gets more
done for their money and thus are cheaper for their customers.

There are a lot of assumptions in there. Getting everybody to work 168 hour
weeks (24x7) seems like it should be even better, but it turns out that as you
get close to that workload your employees are less productive. Fatigue will
ensure your useful productivity is less than someone working somewhat lesser
hours who is allowed to sleep. (I'm going to assume you require your people
eat at their desk, otherwise starvation will kill them) You also lose because
if there is even a rumor that other companies allow their people who have a
life they will quit, and replacing people cost productivity.

We can take the opposite extreme: you work 1 hour per week. At this point your
productivity is very low because you can never get "in the zone", and in fact
your entire hour at work is spend just trying to remember what you do.

Someplace in the middle is the sweet spot. 20 hour weeks may be worth it -
perhaps you can pay your people half as much and still give them as much
income as they want, and still get the productivity you need to compete.
Perhaps you can justify paying as much for 20 hours as your competitors pay
for 40 hours because you employees enjoy that extra time and so they don't
quit - you get better productivity because you don't have to teach them new
things.

Each company needs to figure it out. in general society has settled on 40 hour
weeks as a good number. There is no legal law making it best, but considering
the compromises it isn't a bad number.

~~~
ghaff
And people are used to what they're used to.

Would a lot of people prefer to work 4 days a week all other things being
equal? Sure. But a lot fewer would be interested in earning 80% (or maybe less
when the cost of benefits are taken into account) of their salary especially
given that their partner/friends/kids/etc. would probably not have that time
off.

And working 5 days a week most weeks just seems pretty normal. As you say,
Western society seems to have settled on that as a fairly reasonable number
with the main variation in how much vacation people get on top of that.

------
luc4sdreyer
South Africa recently avoided a country-wide banking sector labour strike [1].
The reason for the strike would have been to protest against retrenchments in
the industry [2]. I suspect that we'll see an increase in white-collar workers
striking in the future.

[1] [https://www.timeslive.co.za/news/south-
africa/2019-09-26-pro...](https://www.timeslive.co.za/news/south-
africa/2019-09-26-protests-wont-solve-issues-banks-say-as-they-welcome-order-
banning-strike/)

[2] [https://ewn.co.za/2019/09/25/busa-banking-sector-mass-
action...](https://ewn.co.za/2019/09/25/busa-banking-sector-mass-action-a-
protest-and-not-a-strike)

~~~
Mengkudulangsat
Financial instruments (including money) is fundamentally just data. There is
no reason to keep maintaining a large labor force in the sector.

The first wave of labor downsizing in banking came from the closure of retail
branches. The second wave of downsizing, I suspect will come projects like
Libra or CBDCs [1] where issuers bypass banks (now reduced to a redundant
middleman) and reach users themselves.

[1] [https://www.bloomberg.com/news/articles/2019-09-10/why-
china...](https://www.bloomberg.com/news/articles/2019-09-10/why-china-s-
rushing-to-mint-its-own-digital-currency-quicktake)

------
keiferski
It will interesting to see what happens to Manhattan. In the last decade or
so, many local restaurants and shops have closed, only to be replaced by a
seemingly endless stream of bank branches. Ideally, the loss of bank tenants
with deep pockets will force landlords to lower prices enough to bring back
some more traditional establishments.

~~~
chrisseaton
Banks have been opening more physical locations? In the last decade, in
Manhattan? What on Earth for?

~~~
goatinaboat
_In the last decade, in Manhattan? What on Earth for?_

Partly to upsell more complex products like investments and mortgages, but
mainly because surveys have shown that wealthier demographics will only use
online banking if there is a branch nearby “in case”. The cost of a branch is
dwarfed by the additional revenue from those customers.

Source: used to work for a bank that did this, and those were the reasons.

~~~
RHSeeger
I'm one of those people that require an "in case" bank nearby. I've had to
visit the bank in person multiple times in the past year because they kept
screwing up paperwork. In my experience, trying to deal with those situations
on the phone has a high likelihood of both taking a long time and not actually
resolving it.

Plus I have a safety deposit box at my bank for important documents.

~~~
exhilaration
_Plus I have a safety deposit box at my bank for important documents._

Did you see this article and discussion about safe deposit boxes?
[https://news.ycombinator.com/item?id=20545276](https://news.ycombinator.com/item?id=20545276)

~~~
RHSeeger
I hadn't seen it. I'll go read it. Thanks

------
gadders
I wish they'd stop calling computer programs "robots". If it doesn't go
"clang" when I hit it with a spanner it's not a robot.

~~~
edejong
Also, the 'clang' robots that come to mind have a certain amount of self-
reliance. The 'non-clang' robots (which are basically macro's running in VMs),
stop working as soon as an unexpected popup appears, the software is upgraded
or the products on one page are suddenly on two.

No, the 'non-clang' robots are an indication of the software engineers' gross
failure to properly integrate and standardize data exchange between solutions.

~~~
9nGQluzmnq3M
The article is referring to contact center (support) automation with this kind
of thing, which is a pretty far cry from Selenium scripts.

[https://cloud.google.com/solutions/contact-
center/](https://cloud.google.com/solutions/contact-center/)

~~~
marvin
Speaking from knowledge of the rhetoric in the Norwegian banking sector of the
last few years (which is very automated), "robots" in the banking sector has
referred to three things: Chatbots that don't work, macros that click around
in a user interface to perform repetitive backoffice or customer support
tasks, or plain old software that automates business processes in a scalable
manner.

Not surprisingly, only the last of these stand the test of time, and most
organizations that jump on the bandwagon will realize that they need to hire
more software engineers and automate their business processes at the root.

For some, this is a long and painful realization. I spent six months trying to
convince the appointed leader of a "robotization" initiative that what they
were doing is actually software engineering, and that involving developers at
an early point would be a better use of their money. They eventually made the
mistake themselves, and got their own developers 18 months later.

Maybe 20 years from now, we will have technologists on the board and in
executive positions at these companies, and these decisions can be made in an
adult manner.

------
dragonsky
And in the remainder of the world this has already happened.

In Australia you are lucky to find a bank with real people working in it, they
have mostly been replaced by Automatic Teller Machines (ATM's) and if you do,
they will normally be working at selling you insurance or investments.

------
Quarrelsome
so this remains the threat of several decades ago (i.e. chatbots are not new)
of losing customer services jobs to human pastiches? Is this something new or
just a continuation of self-service checkouts and automated payment options?

I still feel like there are many human-contact roles where an AI isn't going
to cut it.

~~~
thrower123
Chatbots are almost universally subpar; there's been a lot of work at trying
to marry them up with natural language processing and other whizz-bang AI
techniques, but still, you get down to the nitty gritty that it's a lot of
work to design and implement something that's more than just a glorified IVR
tree. Very few organizations will have the time and resources to make a decent
experience.

~~~
romdev
I frankly prefer a chat(bot or not) because I have a transcript of what has
been discussed. Also, it's kinda fun to guess if it's a bot without offending.
This is a real excerpt at the end of a helpful chat with Comcast: guest_ > You
seem really nice. I've read about computer programs that can simulate nice
people. Are you really a person? Cecilia > yes, i am guest_ > Who won the
superbowl? Cecilia > i'm not familiar with it , im sorry

------
ParkerContent
Wrote this as part of a recent article, "The World Economic Forum predicts
that by 2022, 75 million roles may be eliminated due to technological changes,
including automation. However, other advances may result in the development of
133 million new roles requiring new skills."

Source: [https://www.weforum.org/agenda/2019/04/skills-jobs-
investing...](https://www.weforum.org/agenda/2019/04/skills-jobs-investing-in-
people-inclusive-growth/)

------
antisthenes
I'm surprised this hasn't happened sooner.

Banking as a profession relies on a fairly strict set of rules , most of which
can be automated. Thus, the leftover role of the banker is to navigate the
regulatory requirements within the the scope of the automated task.

As well as the programmers to automate it.

------
visarga
I assumed it would be about RPA - robotic process automation. It reduces time
spent in repetitive desktop activities.

------
blatchcorn
Time to go back to subsistence farming. Heck I should create a start up for
subsistence farming as a service

~~~
Traubenfuchs
Before you thought it up, 5 people already did it:

[https://yourstory.com/2019/03/faas-agritech-startup-
farmers-...](https://yourstory.com/2019/03/faas-agritech-startup-farmers-
profitable-6zmc83lyci)

~~~
dawg-
I don't understand, it seems like these are just rental services for expensive
farming equipment? Are we just calling rentals [Blank] as a Service now? Maybe
Enterprise should change their business model to Cars as a Service.

------
A4ET8a8uTh0
It would if it could, no doubt about it. Who knows what kind of technological
advancements we will see.

I will tell you what I see today. Salesmen selling 'culturally aware fuzzy
logic' that promises to automate just about anything and let leadership just
read beautiful dashboards. Depressing stuff. And it sells too.

And 200k over a decade? Wake me up when AI replaces CEOs.

