Deutsche Bank CEO John Cryan, who has been planning a “big number” of job cuts at the German lender, thinks robots could replace a large chunk of its workforce. Cryan has already cut thousands of jobs as part of a five-year restructuring plan, and he hinted in a Financial Times interview (paywall) that he’s ready to cut much deeper by using technology like artificial intelligence and machine learning to automate banking tasks.
The bank currently employs 97,000 people, but in a telling comment, Cryan noted that Deutsche Bank’s main rivals have about half that number on their payroll. He told the FT that the ratio of sales and trading roles to back office staff was “out of kilter,” and that the bank’s processes were far too manual and error-prone. He is also looking to close bank branches as part of the restructuring.
The rest of the financial industry is struggling with similar problems, but most executives aren’t nearly as forthright about it as Cryan. Two months ago, he said (paywall) the bank’s accountants who “spend a lot of the time basically being an abacus” will need to find new things to do.
By next year, around 75% of financial firms will either explore or implement artificial intelligence technologies, according to a survey by Greenwich Associates. The research and consulting firm thinks some 15% of the industry’s jobs are at risk.
Deutsche Bank’s woes go beyond employing too many costly accountants. It used to the be world’s biggest investment bank, but lately its trading revenue has lagged behind its rivals. In the first nine months of this year, the bank’s revenue is down by 10% versus the same period last year.
Cryan is refreshingly honest about the bank’s struggles—maybe too honest. The bank has struggled to win back customers, and talk of replacing thousands of employees with machines is unlikely to motivate the ones whose jobs aren’t on the line.