Myth Buster: Is Job Loss in the Financial Services Sector a By–product of the Fintech Explosion?

Published on 19 Apr, 2019

Technology is expected to completely replace human interference. This is a myth that threatens the majority of financial services personnel. Financial services providers, the flag-bearers of technology innovations, have formed lean and productive organizations, leaving employees struggling to survive the advent of technology products. However, the impact may not be as severe as feared by the global workforce. In this article, we have assessed the risks and benefits of technology on the financial services workforce worldwide.

World economies have taken a conscious decision to increase the level of employment across various industry verticals. However, at the same time, new technological innovations have led to many companies adopting automation and other modern techniques to increase efficiency and reduce cost.

Today, technological advancements such as artificial intelligence, data analytics, risk modelling, and chatbots have penetrated several industries, including financial services. Technology is expected to further evolve as more companies focus on revamping their functioning, improving productivity, and offering a unique experience to their customers.

Technological innovations, such as robotic process automation, machine learning, and digitization, have completely transformed the financial services landscape. These new systems have been adopted to modernize various operational services at banks and investment advisory companies, such as:

Artificial Intelligence (AI) in Support Centers

AI assistants have taken over the role to interact with customers over phones, resulting in the quicker resolution of complaints and happier customers.

Digital Banking Services

Internet banking and robust online security systems have enabled banks to grow their business through online channels and subsequently lowered the need to have more branches.


Investment advisory service providers are also adopting new technologies and have now introduced the robo-advisory solution for their clients. This helps investors receive speedy advice at lower cost. 

Risk Profiling

Financial institutions rely on big data, predictive, and cognitive analytics to develop a detailed risk profile of investors and undertake the necessary steps to hedge risks. Computers and data analysis apps ensure error-free results.

So, is technology leading to unemployment? The answer is “No.”  The good news is that technological disruption is not resulting in job loss, but a change in the required skill sets. It has led to the creation of new profiles, which require different capabilities that can be acquired only through training. The following chart shows the impact of technological disruptions on employment; the financial services workforce is required to develop skills to ensure stability, while employment is estimated to remain stable in the coming years.

A majority of technology products are aimed at improving the efficiencies of employees that undertake repetitive and predictive work; in short, automation is only limiting the need for human intervention.

Therefore, increasing the productivity of the workforce would prove helpful. Employees would be able to do more qualitative work, develop new skill sets, and increase their knowledge base.

Job profiles such as risk assessment, financial advisory, and investment/asset management would continue to rely on humans as intellectual intervention is required due to the dynamic nature of the markets. In fact, these profiles benefit from technology products, process automation, risk assessment, and providing client-centric products and services. Employees are able to focus on critical tasks to boost customer satisfaction and achieve business growth.

Financial services companies globally are expected to witness the dual impact of technological advancements. Jobs will be cut, but new profiles will also be created. The job market for financial services is evolving and will have adopted these technological changes.

Thus, the “conflict” between humans and machines would continue to have a diverse impact on the global workforce. Companies will have to optimize headcount through automation and technology advancements to emerge as market leaders. Consequently, employees will have to expand their knowledge base and gain expertise in other areas to ensure their roles do not turn redundant.

Aranca believes that job loss due to technology is a myth, well busted. The upgrade offers opportunities for employers to create a workforce more adaptable to technological advancements. Furthermore, employees are required to develop expertise and adapt to the changing dynamics of the industry to deliver high-value output. Overall, the financial services workforce will remain stable and experience a shift in skill sets.

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