Don’t bank on a job for life

Though banks are becoming more efficient by laying off staff, most customers have yet to feel the benefits that new technology can bring.

SBHD: Though banks are becoming more efficient by laying off staff, most customers have yet to feel the benefits that new technology can bring.

I was sharing a sofa in Westminster with some admirals of industry recently, watching a live cable TV show of proceedings at the Employment Select Committee across the road in the Commons, when a bewildered Labour member made one of those penetratingly simple points about British industry that you never seem to hear from Tories these days.

He (Ken Eastham, I think) said that successful British companies used to boast that they were taking more people on. Now the same firms use the size of their rationalisation programmes as examples of progress.

The admirals nodded balefully. It is true, particularly of the privatised utilities, but also the retail service sector, that greater kudos attaches to letting staff go than it does to recruiting them.

It must be to attract the kudos that goes with the supposed efficiencies of a “right-sized” workforce that Lloyds Bank chief executive Sir Brian Pitman let it be known at the weekend that Britain’s banking industry needed to shed a further 75,000 jobs, in addition to the near-100,000 that have gone during the past six years.

The move is, as ever, about the greater efficiencies that technology can deliver to meet increasingly fierce competition in the financial services market. Banks, evidently, don’t need people as much as they did.

You can see Pitman’s point. As a resource, human beings don’t really seem to have worked for the high street banks. As I have said here before, everyone has a bank horror story and in the usual course of a working week you will hear one from someone.

Last week a friend of mine who works in the City lost her bag – with chequebook and accessories. She was told by Lloyds that she would be unable to withdraw cash with a “counter cheque” other than at her own branch in Kensington (where she no longer goes) and would have to wait ten days for a replacement chequebook. She is committed to work during bank hours, prohibiting a cross-town journey, and so had to borrow the money for a weekend away.

That’s her money in the bank, her inconvenience from being denied access to it – unless, of course, she took time from work to travel to “her” branch.

As I say, staffing banks with humanoids appears to have failed as an experiment. So one hopes that their rationalisation and the ensuing investment in technology delivers the likes of Lloyds with the competitive edge that it seeks.

On current evidence, the banks appear to have laid off swathes of people without making the kind of technological advances that, for example, could deliver a counter cheque at any branch in the capital (or, indeed, could do away with chequebooks).

So we have entered a period in which banks are between the era of relatively high staffing levels and the dawn of technological prowess.

This could be a vortex into which what service exists finally disappears entirely – a sort of retail banking black hole, where matter is so dense that not even money can escape.

It is, of course, a bit hard to pick on the banks. They just happen to have one of the highest consumer profiles in British business. Right-sizing (for which read redundancy programmes, voluntary or otherwise) is now an immutable feature of our economy. It is how the privatised utilities have made themselves profitable. It is how marketers have widened their margins through direct selling rather than maintaining expensive retail premises.

Little wonder that the Labour party has abandoned the principle of full-employment for a mealy-mouthed, but more appropriate, Clause Four that speaks of individual fulfilment.

Whatever the effect on unemployment statistics, we are entitled to know what sort of business is likely to emerge as a result of the low-staff, hi-tech trend. We are, naturally, talking about the virtual corporation. In this context, it is worth noting that New Saatchi has just signed a “co-operation agreement” with Paris-quoted Publicis Communication, that, in turn, has an alliance with US group True North. All of which puts the combined agency network in the global Top Ten.

Not bad for a breakaway outfit, with 30 staff, in a temporary office in London. New Saatchi’s global presence is, I can say with all the irony I can muster, a virtual reality.

Similarly, though on a grander scale, Cable & Wireless is capitalising on its global presence by marketing to multinationals through a worldwide federation of local companies.

In advertising or telecoms – and the two are inextricably linked – technology is proving an enabler. One can only hope that the same will be said of retail banking. Much of the anecdotal evidence to date suggests banks have made people redundant without much sight, as yet, of the enabling technology – at a domestic UK level, let alone on a global scale. But we shall see.

So much for the ways in which service industries are meant to do business without great rafts of humanity at head offices or throughout high street networks. One wonders – just in passing – how they are meant to market their services to the very people they have made redundant.

A decade ago, it was a fashionable tenet of Thatcherism to say that we were on the verge of a leisure industry boom that would redefine the nature of employment. The collapse of the economic experiments of the Eighties, three or four years of recession and a consumer generation that, in the words of an old Who anthem, “won’t get fooled again” has largely put paid to aspirations of an economy founded on leisure.

But the social fragmentation, both in our working and domestic lives, that comes with the technology means that the prospects for mass advertising look increasingly bleak. After the recent advances in database marketing, I should not need to tell anyone that. Targeting these days is potentially so tight that no one can be forgiven for facing the millennium with a marketing plan that is the European peace-time equivalent of blanket bombing.

Technology provides the means of identifying and delivering to potential markets as discrete as individual households. That presents an opportunity to those with the vision to take it, and a threat to the rest.

One hopes that the UK retail banks fall into the former category. It is one thing to save money by replacing staff with technology, quite another to invest the money saved in technology that keeps them at the competitive cutting edge.

George Pitcher is joint managing director of media consultancy Luther Pendragon.

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