4,000 cut, locked out even.

If 4,000 people are cut from a huge international bank, what would happen? Well, it will definitely be attracting a lot of negative publicity not just for the bank but also the banking sector. Is this the start of more negative changes to come? Standard Chartered bank started its dismantling of its stock broking, equity research and equity listing desks worldwide. 4,000 jobs in retail banking is out and in Asia, 200 job cuts has happened. The workers arrived for work only to find out that their job was gone. Before everyone said, why is the bank so heartless, do note that when you need to ‘fire’ 200 people, you would not want them to get the letter and start creating chaos in the whole office. I think when it comes to this point, there’s not a lot of choices. Some in Singapore were escorted from their desks. It’s tough to imagine. Thats why all of us should at least make sure we work hard and always continue to learn so that even if we are suddenly let go, we can at least still find a job sooner rather than later.
It was reported that this is not a sudden decision. Standard Chartered has been troubled for two years. Of course the comparison was due to the record profits the whole decade before. I do not think banks are losing money but because of high expectations, many things have to be done to fulfil those expectations.  Lots of other things happen including falling commodity prices, slowdown in a lot of its emerging countries together with a surge in bad loans and rising regulatory costs. A fraud in China also made it lose US$175 million. Closing the losing money business would enable the bank to save up to US$100 million a year beginning 2016. Actually, all the major banks are also facing these kinds of potential bad loans and rising regulatory costs. Especially as the whole market slows, businesses may start to face pressure, laying off some of their workers who could not find a new job quickly and everything deteriorates from there. Now do you know why China has started to ‘warm up’ its property market instead of waiting further? Read here: China Property Market Boost – All the measures
Personally, I think the most major thing that has happened is not just about the market changing but it’s also how the online is evolving. There is really less need for ever more tellers or desk-bound finance staffs. Even the number of branches would no longer need to be opened at lightning speed. Still remember when there were bank branches that were open even on Sundays? Today, majority does not even bother to open on Saturdays. When you issue a cheque these days, you are charged ever more money to process them while an online transaction costs you 10 cents (RM). With your smartphone transferring money to your loved ones can be done within minutes compared to driving to a bank, find a parking bay, get down, take number and queue and then submit your forms, wait for the teller to complete the process, leave the bank, pay for your parking ticket and drive home. It’s VERY clear right.
Then again, retail banking is not just about these transactions, there are a lot of other services right? Well…. yes and it can all be performed online. In fact all these hotlines from the developed countries are already handled from the cheaper English speaking countries in this part of the world, Asia. It has been said that once everything can be made more transparent and everyone can be sort of evaluated, even the mortgage application can be fully automated. Perhaps not so soon and not in Asia but do not bet on it not happening. Seriously, I do not think this will happen only to one bank. As smartphones continue to take up shares versus the non-smartphones, the retail segment for banking will increase in size but the staffs needed would continuously be reducing.
written on 11 Jan 2015
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