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July 30, 2018 @ 11:04 +03:00
Something interesting happened in Swedish finance last quarter. The only big bank that managed to cut costs also happens to be behind one of the industry’s boldest plans to replace humans with automation.
Nordea Bank AB, whose Chief Executive Officer Casper von Koskull says his industry might only have half its current human workforce a decade from now, is cutting 6,000 of those jobs. Von Koskull says the adjustment is the only way to stay competitive in the future, with automation and robots taking over from people in everything from asset management to answering calls from retail clients.
While many in the finance industry have struggled to digest that message, the latest set of bank results in Sweden suggests that executives in one of the planet’s most technologically advanced corners are drawing inspiration from Nordea. At SEB AB, CEO Johan Torgeby now says that “whatever can be automated will be automated.”
Nordea, which is the only global systemically important bank in the Nordic region, saw total costs drop 11 percent in the second quarter from a year earlier as staff numbers fell 8 percent to about 29,300. By comparison, Barclays Plc, which has roughly the same market value as Nordea, had almost 80,000 employees at the end of 2017, according to the latest figures. (To be sure, Barclays’s assets are more than twice as big as Nordea’s.)
Nordea’s lower costs helped it deliver a 31 percent annual increase in operating profit last quarter, the best performance of Sweden’s four main banks. And after waiting roughly a year for Nordea’s digital plan to pay off, investors were rewarded when the bank’s earnings report triggered the best share-price performance since early February. Other Swedish banks are now trying to automate more and to do so faster. SEB’s Torgeby says there’s no question that new technology is “impacting customer behaviors and disrupting banks’ existing business models.”