Blockchain and the Human Resources Problem
The advent of blockchain is considered by some to be among the greatest breakthroughs in the e-banking realm. Those “some” include, for instance, experts from the Financial Times, or even officials from major banks. However, there is a significant downside to it all, as the technology may eventually deprive thousands of people from their jobs.
Major banks in Europe and the United States already declared that the would have lots of jobs cut the next year. The decision may affect almost 100,000 people overall. Those entities include such big banks as BNP Paribas and Barclays. The reason for the significant staffing reduction is evident fall of revenues justified by decrease in interest rates and ruthless regulation in force after the latest major financial crisis of 2008.
Some, however, say that it is just a beginning, and in the long run the banking industry might face even more drastic desolation.
“Digital transformation could also be a driver of further headcount reduction longer term, with retail banks cutting branches in favour of online services and investment banks cutting back offices in favour of online technologies such as blockchain,” said Jon Peace, London-based banks analyst at Nomura.
Blockchain could indeed make lots of auditors, accountants, and other specialists lose their jobs, as it actually allows for automation of many processes involved in their activities. However, such dramatic shifts may only be possible provided the regulation framework adjusts to the technological changes, which will take much more time as compared to technological implementation of blockchain.
“I can hardly imagine anything like automatic accountancy overall – in terms of legislation. There are complex standards, both international and local. Even now, we have to run double-entry accounting, as there usually is a significant inconsistency between the international and local requirements. Moreover, even if they introduce something like blockchain after all, they will still have to back it with parallel accountancy for a while, as it will take really long to introduce all those amendments in all standards for accountancy,” says an expert from a major outsourcing accountancy company who wished to stay anonymous.
“The additional electronification of the security markets should result in an ongoing swap of capital for labour, [and] more machines over people,” adds Mr. Peace.
So, when it comes to disrupting the current systems of accountancy and banking, blockchain might eventually become the factor to fire thousands of people. However, even though it is possible nowadays, it is not likely to happen very soon, at least because of sluggishness of international and national legislators.
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