Consider venerable State Street, a 224-year-old custody bank that predates the steam locomotive and caters to institutional investors such as pensions and mutual funds. In February, State Street executives told analysts that after spending five years upgrading technology systems, they realized how much more could be done. “We have 20,000 manual interventions on trades every day,” said Michael Rogers, president of the Boston bank. “There’s a huge opportunity to digitize that and move it forward electronically.”
But one person’s opportunity is another person’s exit package. State Street had 32,356 people on the payroll last year. About one of every five will be automated out of a job by 2020, according to Rogers. What the bank is doing presages broader changes about to sweep across the industry. A report in March by Citigroup, the fourth-biggest U.S. bank, said that more than 1.8 million U.S. and European bank workers could lose their jobs within 10 years.