Administrative jobs in banks are continuously declining.
Due to advancements in digital technology, the financial sector is undergoing many major changes. Since the beginning of the digital decade, automation has increasingly replaced administrative work, leading to the decline of mid- and lower-level jobs. This change has affected the ratio of officers to support staff, which increased from 50:50 in FY2011 to 74:26 in FY2023. It is estimated that AI will further disrupt the availability of jobs in this sector. Let us also tell you in which report this has been revealed.
We will have to invest in skills
RBI Governor Shaktikanta Das highlighted the challenges posed by digital channels in the introduction to the central bank’s report on currency and finance. These challenges require financial institutions to invest in upskilling and reskilling their employees. He said that digitalisation is decentralising financial work through outsourcing and teleworking. Automation replacing labour could potentially widen the gap between returns to capital and labour, creating a fragmented labour market with low-skill/low-wage and high-skill/high-wage jobs, while mid-level jobs have been displaced due to technology.
Professionals and technicians are being carried out.
The report found that global trends from 2013 to 2019 showed that the number of assistant positions in the financial sector declined, while the number of professionals and technicians increased. This trend is clearly visible in India as well. Furthermore, the report mentions that the turnover rate in private banks will exceed 30 percent by fiscal 2023 due to hiring through digital platforms. The report emphasizes that the growing importance of AI-related skills in the Indian labor market is reflected in the increase in hiring of AI talent relative to overall hiring in 2023 (16.8%) and the highest rate of AI skills penetration.
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Up to 20 percent is expected by 2026
Despite the emphasis on upskilling, the RBI noted that traditional learning and development methods are not sufficient to keep up with the current technological change. Substantial investment is required to develop the necessary skills. In 2023, the Central Bank expressed concern over this, with major private banks revealing that they had to replace around a third of their employees, especially among frontline employees, due to high turnover. India is at the forefront of the digital revolution and its digital economy is expected to account for 20 per cent of GDP by 2026, up from 10 per cent currently. Das commented that digitalisation is paving the way for the next generation of banking, improving access to financial services at a more affordable cost.
risk of data breach
Another major concern is the rising cost of data breaches in India, which is expected to increase by 28 per cent to $2 billion between FY2020 and FY23. Cyber risks, especially phishing attacks and compromised credentials, have become more visible. According to the report, phishing attacks contribute 22 per cent to cyber risk, while the risk of stolen or compromised credentials is 16 per cent. The financial sector will have to address these challenges by embracing digitalisation, investing in upskilling and focusing on cybersecurity.
