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Banks are laying off : only because of digitalisation ?

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ING : 3500 jobs cut. Axa : 650 jobs cut. BNP Paribas Fortis : 1000 jobs cut. As the Financial Times pointed out, some 100,000 jobs will be cut in the banking sector in 2016.
Read again. One hundred thousands. That’s a lot.

The reason which is given is that digitalisation have made jobs redundant. And I very much agree with the fact that digitalisation has dramatically changed the business landscape and has forced companies to adapt. So much actually that I explained the role of digitalisation in the insurance sector on radio and TV.
Yet, I’d like to nuance a little bit what happens in the banking sector which also uses the excuse of digitalisation to justify thousands of job cuts.

Digitalisation is only an excuse

I think that banks have actually provoked today’s situation. Digitalisation is a trap and they made nothing to avoid it.
When customers’ behaviors started changing, banks were slow to adapt. Opening hours remained more or less the same, service slowly got worse, and customers saw less and less reasons to pay a visit to their local branch.
The need to see a human face and to be greeted by a person slowly disappeared. The next step was obvious. The less you need something or someone, the easier it is to switch to a better alternative.

Banks focused on the wrong KPI’s

And that’s exactly what happens. Rather than tightening the ties with their clients, banks just let them go away.
Nowadays customer satisfaction in the banking sector is not measured in terms of quality of service with employees. It’s measured in terms of mobile app response speed.
My argument is that big banks just let everything go apart. They did nothing to strengthen the ties, get to know their customers better. Rather they focused on financial KPI’s. Look for instance at Wells Fargo. CEO John Stumpf, under US Senate audition, reluctantly agreed that he was pushing the “number of products per customers” KPI to investors, leading the bank to open 2m fake accounts to cheat the stock market.

Customers satisfied of their banks: give me a break !

with such practices, don’t be surprised that customers flew away. And yet, banks still keep claiming high customer satisfaction level. Please. Give me a break !
When I hear Belfius proudly claiming a 95% satisfaction level, I almost instantly know that they measure the wrong things.
What i a loyal bank customer today ? A customer who forgot he had an account or who doesn’t want to undergo the hassle to close it. That’s the reality !

I dare to say that service and customer satisfaction have been mismanaged in banks. Today digitalisation is only an excuse to lay off thousands of people.
I’m not saying that digitalisation was avoidable. I’m claiming however that the impact of digitalisation has not been managed well and that thousands of jobs could have been saved, had banks focused on what can’t be digitalized: real one-to-one human service.

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Author: Pierre-Nicolas Schwab

Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)

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