HKMA and banks to equip staff with new skills, as 9,000 jobs are in peril due to digitalisation

·4-min read

With nearly 9,000 banking sector employees likely to lose their jobs in the next few years as branch closures accelerate due to digital banking, the Hong Kong Monetary Authority and industry players are coming up with initiatives to retrain staff to help them stay relevant in the new era of banking.

A recent study conducted by the HKMA and banks showed that about 9 per cent of the about 100,000 front line and back office staff at bank branches in the city will lose their jobs in the next three to five years, said Arthur Yuen Kwok-hang deputy chief executive of the HKMA.

“Banks have been cutting down their branch network due to the changes in customer behaviour in recent years,” Yuen told a media briefing last week. “The Covid-19 pandemic has accelerated the trend as the outbreak has encouraged more customers to shift to using digital banking services instead of going to physical bank branches.”

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This has led banks to shut down some branches or change the design of their branches to offer more than just counter services for deposits and withdrawals, such as wealth management and other more sophisticated banking services.

Arthur Yuen, deputy chief executive of HKMA, says thousands of bank employees will have to be equipped with new skill sets to adapt to the future needs of the banking sector. Photo: K. Y. Cheng
Arthur Yuen, deputy chief executive of HKMA, says thousands of bank employees will have to be equipped with new skill sets to adapt to the future needs of the banking sector. Photo: K. Y. Cheng

Banks have cut almost 400 branches over the past 20 years, with the current number standing at around 1,100, HKMA data shows. And the number continues to decline fast. Last year, DBS Bank (Hong Kong) closed three branches, while Bank of East Asia closed nearly 20 branches over the past decade.

But some banks were taking a different approach for new branches. Standard Chartered Bank said it will open a paperless “green branch” later this year, where it will offer sustainable banking products.

“Such a trend will mean thousands of bank staff in the next three to five years may lose their jobs as their skill set will be outdated. Meanwhile, there are some jobs in the banking sector, such as in wealth management, green finance and digital banking that is struggling to get the right talent,” Yuen said.

To plug the gap, he said HKMA will work with the banking sector and training institutes to help train staff with new skills.

“Some bank staff who are close to retirement may not like to take a new course, but for those who want to learn a new skill set to avoid being made redundant, the banks should offer training to help them meet future needs,” Yuen said.

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He believes wealth management services may be a natural choice, as about 20 banks have applied to the HKMA to offer products under the Wealth Management Connect scheme.

“Green finance will also need a lot of people. Hong Kong banks will need people who know how to price and certify green investment products as China will need to raise a lot of money to achieve its goal of carbon neutrality by 2060,” Yuen said.

The People’s Bank of China (PBOC) estimates that the country’s carbon neutrality goal would cost it about 2.2 trillion yuan (US$341.25 billion) annually through 2030, the year it aims to reach peak carbon emissions, Yi Gang, the PBOC governor, said in April. After that, the yearly expenditure would rise to roughly 3.9 trillion yuan over the next three decades.

Digital banking is hastening the closure of bank branches in Hong Kong. Photo: Shutterstock
Digital banking is hastening the closure of bank branches in Hong Kong. Photo: Shutterstock

Yuen said the HKMA will also provide training programmes to help attract more university students to join the banking industry after graduation.

HSBC and Bank of China (Hong Kong) expressed support for the HKMA’s training initiatives.

“We give colleagues the opportunity to upskill in a way that’s right for them – whether that is through face-to-face training, online courses, mentoring, job shadowing or volunteering,” an HSBC spokeswoman said. HSBC employees completed 5.2 million hours of training globally last year, she added.

Bank of China (Hong Kong), which has 190 branches – the most in the city, will also provide new skills training for its staff to meet future needs of the banking industry, a spokeswoman said.

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