The banking industry was in major transition even before the pandemic hit, not least due to the digital revolution. Experts agree that the trend will continue and cause thousands of job losses in the industry.
Banks in Switzerland have already cut a substantial number of jobs in recent years – the industry had some 90,000 full-time-equivalents in 2020 according to the Swiss National Bank (SNB), down 20,000 from 2011. Some of these jobs went to service providers situated outside the core industry (for instance to security firms), while others disappeared to financials such as independent wealth managers.
But even if all financial-service firms are taken into account, the statistics show how the industry has declined in recent years. The share of employees working in finance in Switzerland has dropped from 6 percent to 5 percent since the financial crisis, according to «NZZ» (behind paywall).
Digital Wake-Up Call
And that was before the impending savings round which is about to take hold of the industry. The lockdown of last spring acted as a digital wake-up call, finews.com suggested in May of 2020. Traditional banks realized that the «digital customer experience» is more than a buzzword, but core to a client-centric strategy.
Finance start-ups view their technology as supported, and are determined to redouble their efforts to become either a viable competitor or an invaluable partner to established financial institutions. Coronavirus is a catalyst for a wave of digital transformation across the finance industry.
The Big Margin Squeeze
What’s more, banking was already under pressure before the onset of the pandemic crisis. Banks are struggling with the pressures from a squeeze on their margins, which in some respect is a direct consequence of ultra-low interest rates. With strong challengers emerging, including Swiss startups Zak and Neon, traditional banks are facing an ever-stronger push for lower fees. And the bread-and-butter loans business of Swiss banking is returning less and less in terms of solid income, while insurers and pension funds are encroaching on the mortgages sector.
It is not surprising then that HR managers at Swiss banks are looking forward to the coming years with a sense of mixed feelings. A study by the banking employers’ group, cited by «NZZ», shows that more than 10 percent of all jobs in retail banking, wealth management and corporate banking will go within a ten-year period. In the back office, every fourth job is on the line.
Training, Training, Training
The only areas of banking that are likely to see further growth are research and development as well as, naturally, IT. Both will add jobs in the range of 5 to 10 percent, the HR-managers said.
The study underlines the importance of continued training. Be it to help people find new jobs, be it to switch into other segments of finance, areas where further growth is expected.
