The Russian central bank’s director of Fintech, Projects and Process Management has opined that half of the banks’ branches and jobs in existence today will be obsolete in 10 years.
The Fintech revolution is poised to deal a comprehensive blow to the current banking sector, according to Vadim Kaluhov, director of the Financial Technology, Projects and Process Management at the Bank of Russia.
According to a report in Russian state-owned news agency TASS, the central bank director stated:
Over the next 10 years, half of the banks that exist today around the world will see their offices close. Half of the people who work in them, will lost their jobs.
The executive was speaking during a debate concerning industrial automation in various sectors of the economy.
He further implied that banks in the future will exist without employees.
“10 years ago, the question was if banks could exist in their branches without customers,” he stated. “Five years ago, we conducted wide-ranging discussions about whether banks can run without branches and now, the question is if a bank can be [function] without employees.”
The statements are notable beyond the mere speculation they carry, coming from the director of a major economy’s central bank. The opinion strikes a parallel with that of another banking executive in Russia, who had a similar prediction for banks in the next decade. Andrey Sharov, vice president of Sberbank – Russia’s largest bank by assets – believes that new innovation such as blockchain payment technology and P2P lending platforms could render banks extinct in 10 years.
The gloomy forecast for the current banking industry is also shared by former CEO of Barclays, Antony Jenkins. The former executive believes that the banking sector will see an “Uber-like” disruption brought upon by new startups and companies in the Fintech sector.
I predict that the number of branches and people employed in the financial services sector may decline by as much as 50% in the next ten years. Even in a less harsh scenario, I expect a decline of at least 20%.
Featured image from Shutterstock.