Many argue that the labour force of the banking sector will decline in the coming years. The phenomenon of bank personnel reduction in Vietnam has also become noticeable in recent times when it occurs not only in a few small and week banks but also in giant banks with large scale.
At the recent Vietnam Business Summit 2019, Nguyen Duc Vinh, general director of Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), said that in the next five years, the labour force of the banking sector would decrease. Vinh cited at VPBank when in the first nine months, there were more than 2,500 employees reduced thanks to the optimisation of operating and sales systems. More than 30 percent of small loans and cards were made online.
Previously, according to our statistics, in the first six months of 2019, VPBank’s staff (excluding FE Credit) decreased by nearly 2,000 people. Thus, in the three months of the 3rd quarter of 2019, VPBank continued to cut another 500 people. The specific figure needs to wait a few more days when this bank publishes its financial statements for the 3rd quarter.
In fact, not only at VPBank, we can see the trend of personnel reduction has occurred at many banks since the beginning of the year.
In the recent financial report of Saigonbank, at the end of September, the bank’s staff was only 1,409 employees, a decrease of 21 people compared to the beginning of 2019. The staff at Saigon Bank for Industry and Trade (Saigonbank) has also continuously decreased for three consecutive years. By the end of September 2016, the number of its employees was down by 78.
Previously, at the end of June 2019, many banks sharply reduced its employees. At Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), the number of staff at June 30 was 22,164, down 454 compared to the beginning of the year. Similarly, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) cut 108 people, Asia Commercial Joint Stock Bank (ACB) fell by 168 people, Bac A Commercial Joint Stock Bank (Bac A Bank) by 52 people.
In surveys, recruitment plans of banks also tend to be more reserved than in previous years. According to the survey results of the Forecasting Department of the State Bank of Vietnam (SBV), at the end of September 2019, only 22.55 percent of credit institutions said they were under labour shortage. By the end of 2019 compared to the end of 2019, 62.8 percent said they had hired or would recruit more workers (lower than the expected rate of 64.6 percent given in the June 2019 survey); 28.4 percent expected to maintain the number of employees and 8.8 percent forecasted to cut employees.
Sharing with us recently, Nguyen HungCEO of Tien Phong Commercial Joint Stock Bank (TPBank), said that in the future, banking personnel in some parts, especially in simple stages such as data entry, would be replaced by the technology. However, he said that in important stages, especially in the sales team, machines could not replace people.
Hung also said that in the past two years, the bank hardly had to increase its personnel thanks to technology development. Sales team, technology personnel and personnel deploying Basel II were still recruited a lot, but the back office staff was reduced and offset each other.
In this context, labour in the banking sector is facing the most difficult job search in all fields because of a surplus supply.
According to a survey by Vietnamworks, the number of applications for the banking industry in the first half of 2019 increased by 65 percent compared to the same period last year. Banking is also the industry with the highest proportion of job seekers with more than 81 percent of surveyed people in this industry wishing to find a job and skip a job. Meanwhile, the banking industry has not reached the top of the professions forecasted with the highest recruitment demand from now until the end of the year. Accordingly, Vietnamworks ranks banks as one of the most likely tough industries to find jobs and switch jobs in the second half of the year.
Technology is clearly having a huge impact on the banking industry, helping to improve service quality significantly in the past and in the future. But in the same wave, many forecasts suggest that technology will cause the sharpest decline in the labour force in the banking industry. The Wells Fargo report once predicted that 200,000 bankers would lose their jobs to robots in the next decade. Supporting units (back-office), bank branches, call centres and corporate customers’ employees may be subject to a 20-30 percent reduction in employment.
