We are living in a time of rapid change, with digitalisation altering the entire range of human activities. In this context, the banking sector is also transforming rapidly, with new operating models and concurrent changes to the content of banking labour.
The rapid increase in digital transactions – a trend that surged during the pandemic – is changing the labour state of affairs. Banks now offer customers a range of networks and channels to carry out their transactions via the internet and mobile banking.
Moreover, there is now a clear trend towards outsourcing of tasks that banks themselves carried out in the past. At the same time, we are seeing major changes on a global level, with new ‘players’ – fintech and bigtech companies – offering banking products and services, capitalizing on modern digital technology.
Thus, a new landscape is taking shape with new labour terms, new labour risks and new flexible forms of employment, affecting the magnitude and structure of employment, and the allocation of labour.
Digital transformation is expected to bring negative changes, but it can also be an opportunity to upgrade jobs or to create new high-quality jobs, provided it is accompanied by appropriate employment policies.
The Greek reality in the Banking Sector
The digital future of work is already here in the banking sector. Employees expect better opportunities for less monotonous and repetitive work; they expect skills enhancement, up-skilling, more leisure time and decent jobs with sustainable growth prospects. So far, however, little has happened to meet these expectations.
Rapid digitalisation is leading to branch closures and personnel reductions at banks in Europe.
But Greece is seeing a greater contraction of the sector and jobs compared to the rest of Europe, even though we’re quite a ways behind in terms of digitalisation.
In this context, in recent years banks have been using extensive programmes for the voluntary departure of their personnel, including even highly trained young people.
The largest contraction is due not to technological progress, but mainly to the serving of bank strategies for drastically cutting operating costs rather than providing better service for customers or satisfying employees’ needs.
That is why countries with comparable GDP, such as Portugal, have employment and branch rates closer to the Eurozone average than ours.
From 2010 to 2021, bank branches in Greece decreased in number by 61% compared to a decrease of 37.4% in the Eurozone, and employee numbers fell by 51% compared to a decrease of 18.6% in the Eurozone, without this being justified by the performance indicator of population coverage by branches and bank employees. For example, while there is one bank employee per 188 residents in the Eurozone, Greece has one bank employee per 324 residents (72% more bank employees in the Eurozone).
Today, in Greece, at least 40% of customers are unable to use the alternative digital networks, and this fact is not limited to the elderly, but includes citizens who are unable to access appropriate equipment and internet connections due to cost and lack of knowledge and/or infrastructure.
So, new technologies are not the main driver of the contraction of the banking sector in Greece or the exclusion of many customers from banking services. Instead, the explanation lies in Banks’ choosing to push out ‘disposable’ employees and shut down points of sale that ‘drive up operating costs’.
Bank executives are now wondering whether there is any reason to maintain tradition brick-and-mortar bank branches in the new digital age.
Digitally upgrading traditional branches (rather than shutting them down) should be part of banks’ strategy, as the use of digital technologies also reduces the time required for banking tasks at brick-and-mortar banks.
At the same time, training and upgraded roles for personnel at bank branches should be a top priority, because promoting their skills and experience – in combination with new technologies – enables further capitalisation on the comparative advantages of traditional bank branches, which include their wide physical presence (network), the brand name, and their deep customer base.
The brick-and-mortar networks and their workforce are the irreplaceable face of every bank and the physical connection to customers. Above all, banks sell trust and loyalty, which cannot be maintained without the necessary and irreplaceable interpersonal contact.
By incorporating this approach into their strategy, traditional banks will optimise the overall customer experience and capitalise on the competitive advantage of a hybrid bank (physical and digital) over a purely digital bank. In Greece, brick-and-mortar banks still have an important role to play, serving a smooth – rather than jolting – transition to the digital age, operating on the rationale of serving the whole of society, with no exclusions.
The exclusion of citizens from banking services is unacceptable. It is not right for 40% of municipalities to be facing exclusion (e.g. the number of Greek municipalities without a single bank currently stands at 51).
This is a major economic, social and, therefore, political problem, and it must be dealt with immediately as such: bank closures must be halted, and contraction of bank employment must be stopped.
At the same time, remote work developed rapidly, mainly as a measure for responding to the health crisis, and now it is ‘here to stay’. It certainly has many advantages. But it was also found to have many drawbacks during its initial implementation. A significant proportion of employees working remotely work beyond standard working hours, resulting in significant overlap of professional and personal life, to the detriment of the latter. Studies also show that the remote work environment is associated with a high number of negative health impacts, such as stress and fatigue due to almost continuous digital availability, a sense of isolation, employees’ being burdened with all or part of operating costs that should be paid by employers, as well as serious privacy and security issues for employees’ personal data.
The successful digital transformation of banks requires ongoing, appropriate preparation and training of employees. It will help towards a fair transition to the new digital age and the integration of human resources. Digital transformation must be inclusive.
Personnel should remain the dominant productive force of banks. In a timely manner, banks need to fill the gap between current and future personnel skills requirements, without exclusion or discrimination.
There are a number of issues concerning the improvement of the institutional framework for remote work, and they require appropriate interventions and agreements between the social partners. Progress has already been made through recent collective bargaining agreements. What is mainly required, however, is monitoring of their implementation, so that, for example, the employee’s right to disconnect is safeguarded. Moreover, the security of personnel data has to be protected, and it must be ensured that the cost of remote work is the exclusive burden of the banks. Emphasis must be placed on effective mechanisms for systematic, bilateral monitoring of the implementation of the agreed regulations, as well as on effective control by public auditing authorities.
Through an open democratic social dialogue between all parties involved, we must safeguard employment as well as decent working conditions for all employees, transparency and equal opportunities, support structures for employees whose jobs are under threat, fundamental employee rights so that they have access to leave, pensions, family rights and benefits, and appropriate collective representation and negotiation.
The role of Trade Unions
Employees’ unions must analyse current data and anticipate challenges in good time in order to intervene in developments. They need to understand and effectively address not only the problems arising from the new working conditions and the new employment framework, but also the potential impact of the above on employment, wages and the social security system.
Modern unions must adequately inform and train old and new union officials, enabling them to interpret, convey to employees and respond to the challenges of the new era.
The new digital age must, by the same token, find the unions prepared, with new forms of organised union action and new forms of communication (electronic forums, new mechanisms for wider consultation and contact with workers’ groups outside the classic workplace). They must be prepared to design measures for offsetting the impacts of looming tech-instigated disruption. And they must be resolute in defending these measures and promoting their implementation.
Technological progress can and must translate into fair recompense for the expected sharp increase in productivity, with reduced working hours, no reduction in wages, or even higher salaries. These presuppose free collective bargaining, strong unions, and implementation of all of the above through collective agreements. They also presuppose the resolution of serious issues related to the reduction of actual working time, which in many cases illegally exceeds contractual working hours, so that we can then proceed to the reduction of contractual working hours.
Finally, it is a key political, social and trade-union challenge to ensure that no employee is left outside the necessary regulatory framework. A strong framework must be built to ensure that employees in the digital age are secure and adequately trained, with decent wages and rights.
What is certain is that it will be difficult to tackle the new, complex problems with old tools and with conservative, anachronistic mindsets.
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