Anticipating and managing the impact of change
Going digital: Restructuring trends in retail banking
Published:
26 September 2022
Research report
Abstract
The retail banking sector is fertile ground for studying the impacts of digitalisation on work and employment. Financial services are increasingly provided online, without the intermediary of customer-facing institutions. Many banks in the sector have been undergoing serial restructuring since the global financial crisis, and it is one of the few service sectors with stagnant or declining employment. In addition to the technological changes in how services are provided, the sector is also responding to other challenges, including an increased regulatory and compliance burden, competition from fintech, and low interest rates and reduced profitability. The case studies in this report describe examples of recent restructuring in the sector, what motivated the restructuring, how it was managed and how it affected employment, work organisation, and other business and employee outcomes.
Key findings
While most service sectors have experienced job growth over the last decade, employment in retail banking has declined - first due to the financial crisis, followed by digitalisation and the recent move to online retail banking. In parallel, retail banking’s physical infrastructure has reduced, with only around 20 bank branches per 100,000 inhabitants in the EU, compared to around 30 in 2004.
Restructuring in retail banking is frequently large in scale, length and complexity compared to other sectors; it takes place through well-established institutional frameworks of social dialogue, benefiting from high levels of representation and collective organisation. It is an important example of the essential role of social dialogue in mitigating the negative effects of restructuring.
Compared to other sectors, the share of specialised professionals in retail banking has risen rapidly, with two-thirds of those in retail banking in the EU now holding third-level qualifications. To meet this new demand in high-skilled jobs (such as legal experts, data scientists and network security experts) and to boost the employability of those in more traditional bank jobs, it will be critical for the sector to develop targeted skills policies.
Digitalisation has transformed many of the traditional ways of working in retail banking, leading to an increase in the number of ‘computer-facing’ jobs and a fall in customer-facing jobs. The large share of ‘teleworkable’ jobs also saw this sector record the sharpest rise in working from home during the pandemic, where nearly one in two financial sector workers in the EU worked remotely either ‘usually’ or ‘sometimes’ in 2021.
Retail banking is a high-paying sector but it also reports the highest gender pay gap. Although this reflects in part the specialised nature of jobs in the sector, where men are over-represented in higher paying IT-related occupations and in supervisory and managerial roles, the gender pay audits foreseen in the proposed EU Pay Transparency directive will have an important role to play in identifying other drivers of the sector’s high gender pay gap.
The report contains the following lists of tables and figures.
List of tables
- Table 1: Top 6 retail banking occupations in 2011 and 2021, EU27
- Table 2: Characteristics of job loss cases in the financial sector and in all other sectors, 2008–2021
- Table 3: Largest recent restructuring cases in the financial sector at national level, 2020–2021
- Table 4: Companies involved in continuous or serial restructuring, 2019–2021
- Table 5: Summary of the main drivers of the restructuring processes in the banking cases analysed
- Table 6: Restructuring processes at CaixaBank in 2015–2021
- Table 7: Time frames of the restructuring processes
- Table 8: Implementation phases of the CaixaBank collective dismissal plan in 2021
- Table 9: Support measures for employees affected
- Table 10: Quota 100 economic incentive applied to Banco BPM
List of figures
- Figure 1: Number of bank branches per 100,000 inhabitants, 2004 and 2020
- Figure 2: Employment change in service sectors, 2008–2021, EU27 (percentage points)
- Figure 3: Financial and insurance services as a proportion of total employment, 2008 and 2021, EU27 (%)
- Figure 4: Number of employees in financial and insurance services by broad occupational group, 2008 and 2021, EU27 (millions)
- Figure 5: Unadjusted gender pay gap by country, 2020 (percentage points)
- Figure 6: Proportion of young employees (15–39 years) in the total workforce by sector, 2008–2021, EU27 (%)
- Figure 7: Relative prevalence of young employees by country, 2021, EU27 (percentage points)
- Figure 8: Proportion of part-time employees by sector, 2008–2021, EU27 (%)
- Figure 9: Average number of actual weekly working hours in the main job, 2008 and 2020, EU27
- Figure 10: Change in total volume of hours worked compared with 2008, EU27 (percentage points)
- Figure 11: Teleworking incidence by sector, 2008–2021, EU27 (%)
- Figure 12: Teleworking incidence in retail banking before and during the pandemic, 2019 and 2020, EU27 (%)
- Figure 13: Teleworking incidence by gender, 2008–2021, EU27 (%)
- Figure 14: Employee location by broad occupational group, 2021, EU27 (%)
- Figure 15: Number of restructuring announcements involving job losses and job gains per year, 2008–2021, EU27 (%)
- Figure 16: Number of national or subnational cases involving job losses in the financial sector by restructuring type, 2008–2021, EU27
- Figure 17: Offshoring cases, 2008–2021
- Figure 18: Proportions of payment instruments used at the point of sale and in person-to-person payments (left figure) and used online (right figure), euro zone, 2019 (%)
- Figure 19: Use of payment methods during the pandemic, euro zone, 2020 (%)
- Number of pages
-
78
- Reference nº
-
EF22014
- ISBN
-
978-92-897-2280-3
- Catalogue nº
-
TJ-04-22-009-EN-N
- DOI
-
10.2806/146383
- Permalink
| Country | Restructuring case studies database | |
|---|---|---|
| Denmark | Restructuring case studies | Danske Bank |
| Italy | Restructuring case studies | Banco BPM |
| Netherlands | Restructuring case studies | ING Group |
| Poland | Restructuring case studies | Bank Pekao S.A. |
| Portugal | Restructuring case studies | Novo Banco Group |
| Spain | Restructuring case studies | CaixaBank |
Cite this publication
Eurofound (2022), Going digital: Restructuring trends in retail banking, Publications Office of the European Union, Luxembourg.
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