Question

The key point of the case is :

6000 traditional bank jobs to go and 2000 new digital position created as NBA aims to move 60 percent of its business online over three years.
redundancies are expected to cost up to $800 million.
despite record underlying cash profit of $6.6bn, shares fall on cost blow out.

question: determine the facts of the case. Identify and discuss why the NBA is planning to remove 6000 jobs. what are the possible issues faced by the banks?

Answer 1

NBA plans to remove 6000 traditional bank jobs because it is planning to shift to digital banking where manual labor will be placed by capital equipments and Information technology Enabled Services. The work done by man power will now be replaced by machines and thus traditional bank jobs will go.

Initially the bank will have to face an exponential increase in its total cost of production as cost of these equipments is very high. However, in the long run it will prove to be beneficial and banks will easily recover their cost as cost of labor will decline. Another issue which bank might have to face is training the manpower retained to make them familiar with new technology which also involves cost. But these are short run cost which can be covered in the long run.