State Bank of India has claimed that there could be significant job cuts due to technological spendings this year.
Is technology eating away jobs? Arguments regarding this question have been a point of debate ever since the advent of new technologies. While the private sector was initially affected by it, now even the public sector firms are not distant from its effects. State Bank of India has claimed that there could be significant job cuts due to technological spendings this year. SBI Chairman Rajnish Kumar on Thursday said the lender is likely to end the fiscal year with a smaller workforce than what it began the year with. Kumar said, “When you have such a vast and diverse client base as SBI, the need for the human interface will always be there. But, if you ask me, it (employee count) was 278,000 at the beginning of this year, will it remain 278,000? It is unlikely.”
SBI has said that measures of cost efficiencies have to “definitely” come in as a result of whatever the bank is doing on the technology and digital front. It is interesting to note that SBI spends around Rs 4,000 crore every year on technology. Notably, this amount does not include expenditures on ATMs. Kumar claimed that the spending has been continuously increasing year-on-year. Meanwhile, SBI is not the only bank where jobs have been hit by the effects of technology.
In the duration of one year between September 2016 and September 2017, HDFC Bank’s workforce dipped from 95,002 to 86,543. The bank claimed that the September 2016 figure was a peak and the bank had cut its workforce in later quarters. Additionally, in September this year, Yes Bank reportedly let go around 2,500 people, which accounted for more than 10 percent of its workforce. The bank has cited reasons such as redundancies, poor performance and the impact of digitisation.
Meanwhile, at a media event, State Bank of India (SBI) announced its highly anticipated mobile app Yono (you only need one). The latest technology is an omni-channel platform that combines a digital bank and an e-commerce superstore. Finance minister Arun Jaitley will launch the Yono app on Friday. This app will enable users to avail financial services offered by the SBI group, such as personal loans etc. Users will be able to open an SBI account with ease, transfer funds in just a few clicks, avail overdraft facility against fixed deposits, and more.
While the Chairman said, “What we want is an integrated channel structure. It is physical presence, it is digital presence.” One wonders what effect it will have on the regular physical transactions.