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Why you will lose your job in banking and finance very soon

It is my forecast that in the future you will not be able to find a job in your bank or financial institution because more and more ‘things’ will be free. 

Crazy, I know, but hear me out.

We are living today, in what I call a ‘free’ economy.

The free economy is a trend that has gone out of control. 

It started as a marketing strategy, then it became essential for all businesses, and now it will ultimately cost you your job.

While many think todays high unemployment is a knock on from the recession, there is also a knock on worse than the recession in the form of the free economy.

What used to be a trend has become the only way to engage customers today.

Today, every bank or financial institution has to offer customers great free products, I call it ‘free bait’, to stand a chance at engaging a customer - think one year interest feee credit cards, interest free student overdrafts, 3 month free trials,  free smart phone apps, free internet banking etc. etc.

As more and more ‘things’ become free, institutions compete with each other to offer more and more for free, free mobile banking, free bank transfers, the list goes on.

As more becomes free, institutions find ways to cut costs so they can offer their ‘things’ for free to compete. 

The only way they can do this is by replacing your job with technology and computers, innovated by freelance contractors and run by outsourced teams, as we see all around us today.

How did we get here? 

The internet.

With the rise of cloud computing, the price of bandwidth and storage dropping fast, the ‘free economy’ has become a movement for every industry including banking.

In fact my guess, is that right now you and your team are working on the very technology that will replace your job in banking and finance.

As soon as you get it working smoothly, you will be offered a job as a contractor over the next ten years or so.

Drastic, I know, but take a look at the trends.

In order to give all this stuff away for free, companies need to produce their free goods at minimal costs.

This means everything going digital.

Virtually every product or industry that touches digital networks, quickly feels the effect of falling costs, but only when they figure out how to do it without the huge cost of staff, think Egg who created the first internet bank, instead of employing thousands in branches.

So one by one, they are replacing staff with technology at a rapid rate as they automate their free offering.

As the digital marketplace has become global, it has become common practice for businesses to give away some of their very best stuff for free (and lots of it), while ingeniously  developing a way to compete with others who want to give away higher and higher value innovations for free and still have a business - think Google and Facebook.

I came across Wave free accounting software the other day, that offer it for free if you agree to receive adverts - and yes it does almost everything that Sage does. So even finance is following the Google model.

So in the future you will work freelance as a contractor, as part of an outsourced team or as an entrepreneur yourself serving a niche audience, centered around the years of experience you have built up.

My advise, start now, build your client base, develop your offer and start preparing your contacts for when you lose your job.

Remember, as you become a contractor, you have to give away your services for free to stand any chance of attracting a customer in the free economy.

Could we really live in a financial world where all services are outsourced and contracted? 

Love to hear your thought...

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Comments: (3)

A Finextra member
A Finextra member 25 July, 2011, 12:45Be the first to give this comment the thumbs up 0 likes

Isn't this basic Economics - When there is perfect information, economic profit is zero. And it applies to all industries, not just banking. The trouble is, there is never perfect information. The true implications of the Internet are more around redefinition of business models, rather than this headline statement of losing jobs.

A Finextra member
A Finextra member 25 July, 2011, 16:18Be the first to give this comment the thumbs up 0 likes Dera Sirs, So far technology has probably created more new jobs in banking industry including its subcontractors and outsourcing partners than it has replaced. It is like the paperless office, that was predicted in the 1960ies when the first mainframe computers became common. Instead someone invented the printer and the offices have never had so much paper documents than today. The xerox copier and the PC added the last twist to this development that has greatly benefitted the Swedish paper manufacturing industry! In a similar way the personalised computing and global reach through the internet and broadband communication, has added the dimension of customisation of products on a mass market. All this will also require subsystems like identification, authorisation, secure logging of my transactions, privacy protection, AML checks... and so on. Al this in an environment where customers uphold multiple banking relations with the complexity that brings. Job roles will keep changing in the financial industry as they have changed over time. Also organisational set-ups will vary with outsourcing, subcontracting, partnering... and many other organisational models. But I believe that the reachability and personalisation trends are going to protect the jobs that make the financial industry go around since the entire structure and also the systems that enable it are becoming more complex. And complex structures need more smart people to manage them.
A Finextra member
A Finextra member 25 July, 2011, 17:48Be the first to give this comment the thumbs up 0 likes

Simon,

I agree with your long term view but would caution as the Treasury Select Committee has taken a dim view of what constitutes a free account . Also under the recently announced FSA review they are looking at a whole new range of products to review and tend to look very carefully at new business models.

On the bright side the same review is giving the FCA new powers to promote competition. Click here for details :

FSA launches FCA approach document

It is going to be very exciting times for new entrants and we are ready to help them !