Robots could cut 10,000 Australian banking jobs over the next decade

The four major lenders slashed over 4,000 full-time roles in 2017.

Robots could easily cut as much as 10,000 Australian banking jobs over the next ten years as the country’s major lenders ramp up their downsizing initiatives to trim their workforce and improve their operating models, according to Macquarie analysts interviewed by Business Insider.

The country’s big 4 – Commonwealth Bank of Australia, Westpact, NAB and ANZ, have cut an estimated 4,000 full-time roles over the past year.

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“We expect to see a significant reduction in administration, processing and low value-add activities and growth in IT functions. We expect the average cost per FTE to continue to increase; however, the number of FTEs is likely to decline materially over the next five to ten years,” Macquarie noted in its report.

FTEs or full-time equivalent, measures the hours worked by one employee on a full-time basis. It is often used as a metric to show the number of employees in an organization, assuming all that employees work a full-time schedule.

Some of the FTE reductions will likely come from cuts in outsourced employees, leading Macquarie to conclude that automation is likely to significantly hit offshore and outsourced banking functions.

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And Australian lenders are not alone in the wider push for automation to boost profit margins. Citi’s president earlier announced that robots could help cut down its 20,000 employee pool to half. Japanese banks have also been studying greater use of robots as it shuts branches down in a bid to boost profitability amidst an ultra-low interest rate environment.