Emurse

Wage and salary employment in banking is projected to decline by about 2 percent between 2004 and 2014, compared with the 14 percent growth projected for wage and salary employment across all industries. Employment in the banking industry declined from the 1980s to the 1990s as a result of bank consolidations and technology. In addition, many consumers transferred assets from bank deposits to investment accounts offered by stock brokers and mutual funds. Also, the banking business has faced much more intense competition in the lending business from credit card companies and specialized loan carriers. In recent years, employment in the banking industry has stabilized. These factors are expected to continue but at a slower pace, and banks are expected to be better able to compete with nondepository institutions in the future.

The combined effects of technology, deregulation, mergers, and population growth will continue to affect total employment growth and the mix of occupations in the banking industry. The decline in some office and administrative support occupations will be offset by growth in some professional and sales occupations. Job opportunities should still be favorable for tellers and other administrative support workers because they make up a large proportion of bank employees and have high turnover.

The consolidation which resulted from bank mergers contributed significantly to employment declines throughout much of the past decade. Merger activity—at a slower pace—is expected to continue over the projection period, dampening employment growth. At the same time, banks have begun to refocus on the branch as a critical means of servicing customers and many banks will open more branch offices in areas in which the population is growing. However, because of widespread automation of many banking services, fewer employees will be hired to staff new branches than in the past.

Advances in technology should continue to have the most significant effect on employment in the banking industry. Demand for computer specialists will grow as more banks make their services available electronically and eliminate much of the paperwork involved in many banking transactions. On the other hand, these changes in technology will reduce the need for some office and administrative support occupations. Employment growth among tellers will be limited as customers increasingly use ATMs, direct deposit, debit cards, and telephone and Internet banking to perform routine transactions. Other technological improvements, such as digital imaging and computer networking, are likely to lead to a decrease or change in the nature of employment of the “back-office” clerical workers who process checks and other bank statements. Employment of customer service representatives, however, is expected to increase as banks hire more of these workers to staff phone centers and respond to e-mails.

Deregulation of the banking industry allows banks to offer a variety of financial and insurance products that they were once prohibited from selling. The need to develop, analyze, and sell these new services will spur demand for securities and financial services sales representatives, financial analysts, and personal financial advisors. Demand for “personal bankers” to advise and manage the assets of wealthy clients, as well as the aging baby-boom generation, also will grow. However, banks will continue to face considerable competition—particularly in lending—from nonbank establishments, such as consumer credit companies and mortgage brokers. Companies and individuals now are able to obtain loans and credit and raise money through a variety of means other than bank loans. Therefore, some loan officers may be replaced by financial services sales representatives, who sell loans along with other bank services.