AI Poses Threat of Technological Unemployment to SA Bank Staff

By Fazila Farouk

A few weeks ago, NewZroom Afrika interviewed tech expert, Arthur Goldstuck, about a report from Citigroup that 54% of jobs in the global banking industry are likely to be lost to automation. Goldstuck rightly argued that Citigroup is behind the curve regarding this trend, whilst pointing out that job losses have been a feature of the banking industry in SA for the past decade, not just due to AI, but also because of the mobile revolution. He also correctly argued that skills development aimed at re-deploying staff within the banks is unworkable because of the low skills base in SA’s banks.

I conducted empirical research on technological unemployment in SA’s banking industry some five years ago when there was a big drive towards digitalisation, which corroborates Goldstuck’s views.

My research found that in 2018/19, more than five thousand people lost their jobs due to the digital re-alignment strategies of SA’s “big four” banks—a period I’ve labelled “peak digitalisation”.

Given SA’s post-apartheid status, my research focuses on inequality. As such, I was interested in the demographic profile of those affected by technological unemployment.

My interviews with senior representatives from SA’s “big four” banks, which included c-suite execs, revealed a dedicated focus on digital realignment strategies to respond to the emergence of fintech and to Big Tech companies encroaching on banking activities.

But they were tight lipped about who exactly was affected by technological unemployment. Neither refuting nor confirming figures quoted by the media, respondents simply refused to answer questions about reported job losses. They also side-stepped questions about the racial composition of staff most at risk by vaguely referring to the employment equity and BEE targets of their banks.

The proletarianisation of white-collar work linked to large numbers of women entering the workforce from the 1970’s onwards is well documented.

Similarly, banking sector reports indicate that large numbers of staff who are Black women are engaged in clerical support work. AI has made precisely these kinds of jobs redundant. Meanwhile, many bank staff lack post-matric qualifications—up to two thirds in 2020. These three facts overlap to identify Black women as the biggest casualties of technological unemployment in SA’s banks.

As banks increasingly resemble tech companies, they are seeking to expand staff in their highly specialised skills-dependent technology divisions. Currently, these divisions also happen to be steeped in tech bro culture, which women in general, but Black women in particular find difficult to break into. Whilst exposing who the winners and losers are in the 4IR, this phenomenon also highlights the new transformation challenge for SA’s banks. I didn't come away from my meetings with banking execs feeling like they had a plan for how to address this.