Naira Redesign: Bank Jobs Under Threat|Omohglobalnews

The redesigning of three denominations of the naira – N200, N500 and N1,000 – by the Central Bank of Nigeria (CBN) and adoption of cash-less banking will have difficult implications for the teller jobs in banks. Aside the possibility of having the teller jobs gradually erased, the Banks Neutral Cash Hubs set up by the apex bank and Bankers’Committee will also come under threat as stakeholders migrate to digital payment platforms, writes Assistant Business Editor COLLINS NWEZE.

The redesigning of the naira by the Central Bank of Nigeria (CBN) presents several implications for the banking industry, businesses and economy.

While it presents quick road to the adoption of e-payments, it could lead to job losses in the sector, especially those that handle cash transactions.

So far, the policy has  reducted cash in circulation from about N2.7 trillion to N400 billion.

The Banks’ Neutral Cash Hubs set up by the CBN and Bankers’ Committee, a fallout of the policy, would reduce cash management costs.

These developments have made banks to review their business models in line with new technological changes and CBN’s naira redesign and upgraded cash-less policies.

The cashless policy, which limits daily cash withdrawals to N20,000 and ties such deals to Bank Verification Number (BVN) means there will be less cash to handle in branches, putting the work of bank tellers at risk.

A financial sector status report stated that the new development could lead to the scrapping of teller jobs in the next three years.

Already, banks are cutting bulk teller jobs, and limiting cash handling to one or two tellers at every branch.

In a report entitled: Repositioning for Relevance in a Competitive Environmentformer president, Chartered Institute of Bankers of Nigeria (CIBN), Uche Olowu,  had hinted that the business model of the banks was being challenged by technology.

He said Artificial Intelligence (AI) and Robotics are changing the game in customer relationships and front office operations.

He said jobs previously reserved for officers such as tellers might become obsolete, adding that in the next three years, machines would be perform approximately 30 per cent of bank work.

He said in recent years, banks have gone from investing in branches or other brick and mortar establishments to greater investments in financial technology (Fintech) and specialised human capital.

Experts said investment in specialised human capital is, particularly, significant given the domination of technological solutions which are taking over human jobs.

According to a report by the McKinsey Global Institute, 60 per cent of occupations have at least 30 per cent of activities that are technically automated.

Furthermore, the report states that about one-fifth of the global workforce will be impacted by the adoption of AI and automation and by 2030.

It is also estimated that robots will replace 800 million workers across the world.

The World Economic Forum further projects that by 2055, nearly half of work in occupations would be automated.

Also, the PricewaterhouseCoopers (PwC) states that the effects of automation would not only alter the jobs available to humans, but also the perceived value of these jobs

“It is also pertinent to mention that the increasing competition in the digitised banking environment would no longer be between banks but with non-banking institutions. FinTech and big tech firms such as Google, Amazon, Facebook and Apple are capturing more of the banking value chain.

Furthermore, payment service banking is set to further disrupt the banking industry. For example,  telecoms such as MTN and Airtel Nigeria had been granted licences by the CBN.

PwC suggests that from 2025 to 2035, a market economy would readily exist without traditional banks.

Experts advise that  any bank staff who wishes to survive and thrive within the industry over the next 20 years must adapt and become relevant to the future of banking.

“Indeed professionals and would-be banking professionals must reposition themselves for relevance in the changing environment. Such statistics as stated above confirm that in the future workplace, we may not be competing for jobs with other humans but with robots,” they said.

In the age of digitisation it is important to stay relevant regardless of the cadre of employment you fall under. “Banking professionals must consistently keep in touch with trends in their field of expertise and the impact such trends would have on your job role. Aspiring bankers are also expected to gain a full understanding of the emerging technical skills sought after in the industry. Constantly keeping tabs on trends and required skills would increase your value professionally and in turn your relevance,” they added.

For instance, the banking sector, which  has undergone some changes,  will undergo added disruption.

Though previously, there were no apps, we are certain of further disruption underlined by AI, machine learning, robotics, big data analytics among others.

Banks are faced with technological changes and have had to respond through the adoption of and adaptation to disruptive technologies in their business models and in their broad corporate strategies.

This is to remain relevant, increase convenience and productivity and make banking simple.

Setbacks for Banks Neutral Cash Hubs

The inauguration of Banks Neutral Cash Hubs (BNCHs) meant to reduce costs and improve the efficiency in cash management value chain is also likely to experience major setbacks.

The cash collection centres, codenamed BNCH, is expected to run on the technology.

How this technology will work is stated in the guidelines for the BNCH released by the apex bank.

The regulator said the technology implemented by the BNCH must comply with the industry standards.

The BNCH, it said, will ensure that transaction information is transmitted. The technology comprises infrastructure modules that work with the platform provided by the Nigeria Interbank Settlement System (NIBSS) and that customers get value for their deals.

The CBN also directed that BNCH‘s payment instructions are executed, and immediate reversal effected. Where there is a communication failure during a transaction, receipts or durable acknowledgements transactions must be generated.

Also, audit trail is maintained and made available on request while settlement information details are preserved for five years, and are made available via the Cash Activity Reporting Portal (CARP).

The BNCHs are also required to put in place systems that address availability of services, data confidentiality and integrity, encryption of e-transactions.

Also to be addressed are customer accountability and non-repudiation of transactions, error messaging and exception handling, and the need to secure integration to the CARP.

The apex bank said the scheme would reduce costs and improve efficiency in the value chain.

“The financial requirements for an approval to operate as BNCH, which may be amended by the CBN as it deems necessary, include non-refundable application fee of N100,000; and non-refundable approval fee of N500,000.

”The BNCHs are cash collection centres to be established by registered (licensed) processing companies or Deposit Money Banks (DMBs) based on business needs. They will be located in areas with high volumes of commercial activities and cash transactions. The hubs will provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled,” the guideline added.

Continuing, the CBN said the  key objective of the BNCH is to reduce the risks and costs borne by banks, merchants and huge cash handlers for cash management, deepen financial inclusion, and leverage shared services to enhance cash management.

The regulator also spelt out functions of a BNCH, saying it may receive  naira-denominated deposits from individuals and businesses with high volumes.

According to the guidelines, the CBN has the right to access a BNCH facility for compliance monitoring and examination of records/books.