Nordea Bank plans further push into AI

Maria Nikolova

The bank has unveiled plans for a web-based robot advisor, but also said its business transformation will involve significant job cuts.

Nordea Bank AB (STO:NDA-SEK) has reiterated its commitment to the use of artificial intelligence (AI) solutions in its operations, but its business evolution will be accompanied by human staff reduction.

In the announcement of its results for the third quarter of 2017, Nordea said the use of AI will enable enhancing customer experience. The company said a customer service chatbot was presented in Norway in September and there has been very positive reaction by customers to it. The service has been accessed more than 7,000 times and answered over 10,000 questions from both personal and corporate customers.

In December, Nordea will be launching a web-based robot advisor, which will allow for investment and savings advice wherever and whenever it suits the customer best.

The report, however, brought some dismal news for the bank’s human employees. Casper von Koskull, President and Group CEO, said Nordea was almost two years into a transformation shift. He noted the investments made in technology, such as the core banking platform, digital banking and IT remediation.

Given that these investments are starting to deliver as expected, he said it was time to enter the next phase of the transformation, involving bringing down costs and increasing efficiency.

“This transformation requires a shift in competence among our employees. Additionally, in order to secure long-term competitiveness, we also plan to reduce the number of employees and consultants with at least 6,000 of which approximately 2,000 are consultants”, Casper von Koskull said.

Nordea is not the first financial services business to reduce the number of employees in light of business transformation and the advancement of novel fintech solutions. In September this year, Mitsubishi UFJ Financial Group Inc (TYO:8306) said 9,500 jobs will be automated in Japan. These jobs account for about 30% of the overall headcount nationwide at MUFG’s main subsidiary, Bank of Tokyo-Mitsubishi UFJ. The company will try to move employees who have been engaged in relatively simple work into more creative roles through retraining and other measures.

Sberbank Rossii PAO (MCX:SBER) said in January this year it would lay off 3,000 employees at its legal department thanks to the enrollment of a robot lawyer. There is even more gloomy news for the human staff at the bank, as Herman Gref – CEO and Chairman of the Executive Board of Sberbank, has said the number of employees in back office roles at the bank will be reduced 12 times by 2021, with one of the main factors for the cuts being the increased use of robots at the bank.

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