Just a down payment for an industry facing radical overhaul are the 6,000 job cuts announced last week at Nordea Bank AB, according to Chief Executive Officer Casper von Koskull.
“If somebody says, where are we, or where are banks, 10 years from now, banks could easily have half what they have today,” in terms of personnel, von Koskull said in an interview in London on Friday.
When it revealed the staff reductions, which amount to well over a tenth of the work force of the Swedish bank, stunned the unions, analysts and investors last week by Nordea. Unions called the step “shocking” and “brutal.”
Compared to what it was before the financial crisis, the industry is already a lot leaner. There are about 14 percent fewer people in finance in the region than compared to before 2008, the European Banking Federation estimates. At the present moment, the number of people working in bans in Europe are about 2.8 million. In the third quarter, there was about 31,500 employees in Nordea.
The future of the banking industry is represented by what Nordea is doing, Von Koskull says. A universe in which only the leanest, most digitally advanced and efficient banks will thrive was described by him while speaking to analysts in London last week. He said that those banks and firms that are already failing are the ones that are still living in the banking dark ages.
“The fact that some banks -- not this bank -- have been technically insolvent every 15 years, that really does not mean that they are resilient,” he said. “Resilience is something that this industry, and any bank, needs. And that is something that we have been building. And resilience is not only about capital, resilience is your operations, your systems, and everything you do.”
von Koskull says the bank will soon be using a lot less of its income to cover costs, even though the upfront expense of such a transformation isn’t small. In the third quarter, 51 was the ratio of Nordea’s costs to its income. When the bank has transformed itself, that number will be in the “lower 40s”, Von Koskull says.
A pioneer in how it’s looking at the fundamental shifts now gripping the industry is how he views his bank, the Nordea CEO said during the television interview.
“We are maybe one of the first ones,” he said. “This is not a cost cut, per se, it is a way of doing business differently, where you need less people.”
He said complaints from unions are hard to understand. “They know” what’s coming, he said. “We’ve been talking about it for two years.”
“I think it’s very clear that it’s an ongoing trend in the financial industry, given that this is an industry that is very digital,” von Koskull said. “You can digitize and use AI in a very big way. Combined, of course, with a personal touch.”
(Source:www.bloomberg.com)
“If somebody says, where are we, or where are banks, 10 years from now, banks could easily have half what they have today,” in terms of personnel, von Koskull said in an interview in London on Friday.
When it revealed the staff reductions, which amount to well over a tenth of the work force of the Swedish bank, stunned the unions, analysts and investors last week by Nordea. Unions called the step “shocking” and “brutal.”
Compared to what it was before the financial crisis, the industry is already a lot leaner. There are about 14 percent fewer people in finance in the region than compared to before 2008, the European Banking Federation estimates. At the present moment, the number of people working in bans in Europe are about 2.8 million. In the third quarter, there was about 31,500 employees in Nordea.
The future of the banking industry is represented by what Nordea is doing, Von Koskull says. A universe in which only the leanest, most digitally advanced and efficient banks will thrive was described by him while speaking to analysts in London last week. He said that those banks and firms that are already failing are the ones that are still living in the banking dark ages.
“The fact that some banks -- not this bank -- have been technically insolvent every 15 years, that really does not mean that they are resilient,” he said. “Resilience is something that this industry, and any bank, needs. And that is something that we have been building. And resilience is not only about capital, resilience is your operations, your systems, and everything you do.”
von Koskull says the bank will soon be using a lot less of its income to cover costs, even though the upfront expense of such a transformation isn’t small. In the third quarter, 51 was the ratio of Nordea’s costs to its income. When the bank has transformed itself, that number will be in the “lower 40s”, Von Koskull says.
A pioneer in how it’s looking at the fundamental shifts now gripping the industry is how he views his bank, the Nordea CEO said during the television interview.
“We are maybe one of the first ones,” he said. “This is not a cost cut, per se, it is a way of doing business differently, where you need less people.”
He said complaints from unions are hard to understand. “They know” what’s coming, he said. “We’ve been talking about it for two years.”
“I think it’s very clear that it’s an ongoing trend in the financial industry, given that this is an industry that is very digital,” von Koskull said. “You can digitize and use AI in a very big way. Combined, of course, with a personal touch.”
(Source:www.bloomberg.com)
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