Banks lay off 2,792 staff on automation and profit fall

What you need to know:

  • During the year, returns in the industry declined with pre-tax profit down by 9.6 per cent to Sh133.2 billion compared to the previous year's Sh147.4 billion. he industry now has a total of 30,903 jobs compared to 33,695 in 2016, a fall of 8.3 per cent during the year.

The banking sector shed 2,792 jobs last year, most of them support, clerical and secretarial staff as automation took root in the industry and profit fell.

This happened in a year that the new law restricting lending and deposit rates took effect after having been enacted in September 2016.

During the year, returns in the industry declined with pre-tax profit down by 9.6 per cent to Sh133.2 billion compared to the previous year's Sh147.4 billion. he industry now has a total of 30,903 jobs compared to 33,695 in 2016, a fall of 8.3 per cent during the year.

“Banking sector staff levels decreased by 2,790 (8.29 per cent) from 33,693 in December 2016 to 30,903 in December 2017 as indicated.

“All staff levels recorded a decrease thus leading to an overall decrease in staff levels,” the Central Bank of Kenya (CBK) said in its latest industry supervisory report. The regulator said that the reduction is an indicator of efficiency, consistent with changes in business models and automation. “This is an indicator of the consistent improvement in banks’ efficiency as a result of a review of business models, automation of processes and shift from brick and mortar to alternative digital channels,” said the CBK. The regulator hinted that the industry was likely to continue experiencing changes in staffing because of adoption of such technologies as blockchain and artificial intelligence. “With the adoption of emerging technologies like blockchain, artificial intelligence and big data analytics, financial technology is expected to continue transforming the banking and customer experience,” the CBK said.

The monetary authority indicated that it would remain open to the new technologies.

Returns in the industry declined with pre-tax profit down by 9.6 per cent.