Bitcoin and cryptocurrency continue to incite the banking system, and it is expected that Bank of America will lay off 200,000 people in the next 10 years.

According to The Daily Hodl on October 6th, the increase in technical efficiency may lead to the largest layoffs in the history of the US banking industry. A recent study by Wells Fargo shows that the US banking system is expected to lay off about 200,000 people in the next 10 years.

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(Source: pixabay )

The results of the above research by Wells Fargo coincide with Christina Lagarde’s views. Lagarde will resign as the president of the International Monetary Fund (IMF) and serve as the president of the European Central Bank (ECB). Lagarde said that distributed ledger technology (DLT) such as Bitcoin and other cryptocurrencies is "inciting the banking system."

In an interview with CNBC, Lagarde pointed out that the rapid development of commercial banks and innovative blockchain digital assets have had a significant impact on the financial industry:

I think that anything that uses distributed ledger technology, whether you call it cryptocurrency, assets, currency, or whatever, is clearly inciting the banking system.

She also warned that:

We don't want innovation to over-sway the entire system, which will make us lose the necessary stability.

US financial companies spend nearly $150 billion a year on banking technology, and using blockchain technology can significantly reduce operating costs. Mike Mayo, senior analyst at Wells Fargo Securities, said that bank employee compensation accounts for about half of all bank spending.

Wells Fargo’s research report shows that back office, bank branches, contact centers and company employees are all laying off staff. About one-fifth to one-third of these jobs are related to technology, sales and consulting.

However, financial advisory services appear to be the least affected.

Michael Tang, head of Deloitte's global financial services innovation business, pointed out:

The contact center will change dramatically. There are already chat bots instead of manual customer service, and some people don't even know they are chatting with the artificial intelligence engine because they are always answering questions.

Several other consulting firms and bank executives also expect the banking sector to lay off staff significantly due to the arrival of automation. Earlier this year, McKinsey's research report showed that due to the automation of daily business processes, it is expected that the front desk staff, including bank employees and traders, will be reduced by one-third. In addition, the company's report also stated that the impact of new technologies on employment is global.

In addition, emerging financial technology solutions are rapidly changing the industry. For example, the International Monetary Fund (IMF) reported that more and more South Asian residents are adopting mobile payment platforms.

The International Monetary Fund’s blog post states:

Bangladesh, Indonesia and Pakistan are the countries with rapid growth in mobile payments in Asia; mobile money services have developed earlier in sub-Saharan Africa due to the lack of deep penetration of banks in some countries. The number of mobile currency accounts in sub-Saharan Africa is still leading, and in some countries, the number of mobile payment accounts has even exceeded the number of bank accounts in the country.

Facebook announced in June 2019 that its stable currency, libra, is designed to provide modern financial services to anyone who can access the Internet and own a smartphone, which directly challenges the traditional banking system.

However, adopting a new platform based on blockchain is very difficult for innovators because they need to address specific regulatory issues in different countries. Especially Libra, it encountered considerable regulatory resistance at this stage. And just recently, PayPal has withdrawn from this controversial project.