Financial technology in the next 10 years is threatening employees of banks and financial institutions, according to the latest projections of Citigroup. As much as 30 percent of current employees of banks may lose their jobs as a consequence.
Citigroup's "Digital Disruption" report, released on Wednesday, consisted of 112 pages that detailed its projection. The report stated that the number of employees at U.S. banks would fall to 1.8 million workers when 2025 comes.
European banks will experience an even sharper employment drop at a maximum of 37 percent, the study said.
The report was written by seven Citigroup analysts and financial strategists. It stated that start-ups targeting various sectors of the financial industry would take out finance related jobs.
Much of these current activities are being conducted by lending start-ups such as SoFi, and online payment firms such as PayPal and their affiliates all over the world.
FinTech or financial technology is a new industry sector that primarily uses software to offer financial services. Overall, companies in this industry category are startups, established with the basic goal of disrupting conventional and established financial systems and corporations.
Investments in FinTech tripled in 2013 from $930 million to $4 billion around the world. This nascent technology has experienced a rapid growth in the last couple of years. It has seen aggressive growth in Europe and in the Asia Pacific Region. The Americas are also widely affected by this sunrise technology.
Citigroup's report revealed its latest analysis on the upcoming drastic changes for the financial sector due to the onrushing wave of new financial startups under the banner of FinTech.
Anthony Jenkins, a former Barclays chief executive said in a speech that the present banking system is being challenged by a series of "Uber moments." For this reason, he warned that jobs in the financial sector could drop as much as 50 percent.
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