People look at Xiao Qiao robots during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 3, 2017. REUTERS/Aly Song
Xiao Qiao robots at the fourth World Internet Conference in Wuzhen, Zhejiang province, China. Nordea warns that automation will crimp bankers' salaries. Aly Song/Reuters

Bankers' pay a victim come the robot revolution



The chief executive of Nordea Bank says his industry needs to rethink pretty much everything it’s doing to brace for the future.

And that includes how much it is paying bankers.

The Nordic region’s biggest financial conglomerate is already in the process of cutting 6,000 jobs as part of a shift toward relying more on technology and less on humans. But the chief executive Casper von Koskull says the search for more efficient ways of doing business will not end once those jobs are gone.

“People said automation is only in personal banking,” Mr von Koskull said in Stockholm. “But there are elements of it in investment banking, corporate banking, liquidity management, foreign exchange. You need to look at how much of it is automated and whether there’s less human involvement.”

There will always be a “human element,” he said. But ultimately, “you need to ask the question, what value is the human adding, and how does that affect pay?”

Mr von Koskull’s mission is to blaze a trail that other banks will be inspired to follow. In explaining his world view, he uses phrases like “you don’t need banks, but you need banking”. He also insists that “bankers need to be more tech savvy, and understand how you use tools”.

He envisions a flatter organisation. So when it comes to the bank’s planned job cuts, that means “the ones who are mostly hit are middle to higher-level management, because those layers aren’t needed, or shouldn’t be”, Mr von Koskull said.

None of this should make a career as a banker less appealing, he said.

“If you’re passionate about the customer and about providing value to customers, and frankly also to society, I think it’s a fantastic place, still, to work,” he said.

Investment banking, in particular, is a special case, according to Mr von Koskull. “Because at the end of the day, it’s not just about the facts,” he said. “I’ve always said finance is a social science anyway, it’s not an exact science. So if you’re a merger adviser or a wealth adviser, it’s about trust and relevance.” But even here, “technology will have an impact”.

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And banks are “also a place where a lot of society would say that we are still, even, paid too much”, Mr von Koskull said.

The question of banker pay is one that regularly triggers acrimony from some corners of society. Just last month, the chief executive of UBS, Sergio Ermotti, and a former deputy governor of the Bank of England, Paul Tucker, were at opposite ends of a heated debate questioning the remuneration culture in the finance industry. At the same time, there is a growing list of banks who are ditching humans as they rely more on automation.

Mr von Koskull says that banks who do not follow Nordea’s lead are ignoring “cost drift”. He expects his firm to soon be “probably the only large European bank that has completely transformed its core bank system to a modern system".

"It’s a completely different bank at that cost level."

Ultimately, all of this benefits the shareholders, he said.

“Over the years, while we transform, we have a very clear aim to have a progressive dividend policy, which means it will grow every year in absolute terms.”

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Part three: an affection for classic cars lives on

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

Match info

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Real Madrid 1 (Ramos 73' pen)

The winners

Fiction

  • ‘Amreekiya’  by Lena Mahmoud
  •  ‘As Good As True’ by Cheryl Reid

The Evelyn Shakir Non-Fiction Award

  • ‘Syrian and Lebanese Patricios in Sao Paulo’ by Oswaldo Truzzi;  translated by Ramon J Stern
  • ‘The Sound of Listening’ by Philip Metres

The George Ellenbogen Poetry Award

  • ‘Footnotes in the Order  of Disappearance’ by Fady Joudah

Children/Young Adult

  •  ‘I’ve Loved You Since Forever’ by Hoda Kotb 
FORSPOKEN

Developer: Luminous Productions
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Console: PC, PS5
Release date: January

Company of Heroes 3

Developer: Relic Entertainment
Publisher: SEGA
Console: PC, PS5, XSX
Release date: February

Star Wars Jedi: Survivor

Developer: Respawn Entertainment
Publisher: Electronic Arts
Console: PC, PS5, XSX
Release date: March

Suicide Squad: Kill the Justice League

Developer: Rocksteady Studios
Publisher: Warner Bros
Console: PC, PS5, XSX
Release date: May

Final Fantasy XVI

Developer: Square Enix
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Console: PS5
Release date: June

Street Fighter 6

Developer: Capcom
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Console: PS5, XSX, PC
Release date: June

Diablo IV

Developer: Blizzard Entertainment
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Console: PC, PS5, XSX
Release date: June

Baldur's Gate 3

Developer: Larian Studios
Publisher: Larian Studios
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Release date: August

The Legend of Zelda: Tears of The Kingdom

Developer: Nintendo
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Console: Nintendo Switch
Release date: September

Marvel's Spider-Man 2

Developer: Insomniac Games
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Console: PS5
Release date: Fall

Assassin's Creed Mirage

Developer: Ubisoft
Publisher: Ubisoft
Console: PC, PS5, XSX, Amazon Luna
Release date: 2023

Starfield

Developer: Bethesda Game Studios
Publisher: Bethesda Softworks
Console: PC, Xbox
Release date: 2023

Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

Company profile

Company name: Outsized
Started: 2016
Founders: Azeem Zainulbhai, Niclas Thelander, Anurag Bhalla and Johann van Niekerk
Based: India, South Africa, South-East Asia, Mena
Sector: Recruitment
Investment raised: $1 million
Current staff count: 40
Investors: Seed and angel investors

What is a robo-adviser?

Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.

These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.

Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.

Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.

Match info

Uefa Champions League Group F

Manchester City v Hoffenheim, midnight (Wednesday, UAE)

SPECS

Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now

Results

United States beat UAE by three wickets

United States beat Scotland by 35 runs

UAE v Scotland – no result

United States beat UAE by 98 runs

Scotland beat United States by four wickets

Fixtures

Sunday, 10am, ICC Academy, Dubai - UAE v Scotland

Admission is free

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

Russia's Muslim Heartlands

Dominic Rubin, Oxford

UAE set for Scotland series

The UAE will host Scotland for a three-match T20I series at the Dubai International Stadium next month.
The two sides will start their Cricket World Cup League 2 campaigns with a tri-series also involving Canada, starting on January 29.
That series will be followed by a bilateral T20 series on March 11, 13 and 14.

Developer: Ubisoft Montreal / Ubisoft Toronto
Publisher: Ubisoft
Platforms: Playstation 4, Xbox One, Windows
​​​​​​​Release Date: April 10

One in four Americans don't plan to retire

Nearly a quarter of Americans say they never plan to retire, according to a poll that suggests a disconnection between individuals' retirement plans and the realities of ageing in the workforce.

Experts say illness, injury, layoffs and caregiving responsibilities often force older workers to leave their jobs sooner than they'd like.

According to the poll from The Associated Press-NORC Centre for Public Affairs Research, 23 per cent of workers, including nearly two in 10 of those over 50, don't expect to stop working. Roughly another quarter of Americans say they will continue working beyond their 65th birthday.

According to government data, about one in five people 65 and older was working or actively looking for a job in June. The study surveyed 1,423 adults in February this year.

For many, money has a lot to do with the decision to keep working.

"The average retirement age that we see in the data has gone up a little bit, but it hasn't gone up that much," says Anqi Chen, assistant director of savings research at the Centre for Retirement Research at Boston College. "So people have to live in retirement much longer, and they may not have enough assets to support themselves in retirement."

When asked how financially comfortable they feel about retirement, 14 per cent of Americans under the age of 50 and 29 per cent over 50 say they feel extremely or very prepared, according to the poll. About another four in 10 older adults say they do feel somewhat prepared, while just about one-third feel unprepared. 

"One of the things about thinking about never retiring is that you didn't save a whole lot of money," says Ronni Bennett, 78, who was pushed out of her job as a New York City-based website editor at 63.

She searched for work in the immediate aftermath of her layoff, a process she describes as akin to "banging my head against a wall." Finding Manhattan too expensive without a steady stream of income, she eventually moved to Portland, Maine. A few years later, she moved again, to Lake Oswego, Oregon. "Sometimes I fantasise that if I win the lottery, I'd go back to New York," says Ms Bennett.

 

The specs

Engine: three three 212.7kWh motors
Power: 1,000bhp
Torque: 15,600Nm
Range: 530km
Price: Dh500,000+ est
On sale: early 2023

The Way It Was: My Life with Frank Sinatra by Eliot Weisman and Jennifer Valoppi
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