In the village where a friend lives there used to be a bank. It’s gone, so he does his banking online. I thought of him when I read the recent article in The Herald and one of the subsequent follow-up articles – online in cryptocoin news about the possible effects of Fintech on Scotland’s banking sector.
All these pieces are based on economic modeling (and remember how successful some of that’s been recently) by Strathclyde Business School. Now what follows is no reflection on that original research; rather it’s a rant about the way in which such research is reported.
Prophecies of doom and disaster sell, or rather used to sell, newspapers. Their modern equivalent is clickbait, but in each case the principle is the same – get attention by some over-excited headline and get the reader to start to read the article.
The academic study modelled possible scenarios for the banking/financial services sector and came up with a worst and best-case result of each. The worst case was for a loss of 14,000 jobs (£597M of employment income over a decade – in the way of salaries) while the best case was for a gain of nearly 15,000 jobs (perhaps strangely this was equated to over £1BN of employment income over a decade – although presumably these are reckoned to be higher paid jobs).
As I’ve said, I’ve not got any issue with the range of possible outcomes and both articles linked to above make the point that these are extreme cases. What does stick in the craw is the sub-editors (assuming the media still employs many of them?) latching on to the worst case scenario for their headline. In the case of The Herald, the article appears under the heading, “Thousands of jobs at risk unless Scotland embraces financial technology sector” and in cryptocoin news it’s “Report: Scotland Risks Losing 14,000 Jobs if Fintech isn’t Prioritized.”
The latter goes on to detail some of the warnings made by leading bankers, including Barclays Group CEO Antony Jenkins, who is reported as having said, “I predict that the number of branches and people employed in the financial services sector may decline by as much as 50% in the next ten years. Even in a less harsh scenario, I expect a decline of at least 20%.”
“Well duh”, as my friend in the bank-less village said when I told him. We know that banking is going online. It’s hardly news: it’s decades since First Direct was launched (I checked – it was 1989!) and there has been a recognition that we’re moving rapidly towards a cashless, online financial world for most people. In other words, there will be fewer local banks and therefore fewer staff. But the fifth estate has never let the facts get in the way of a good headline.
This does a grave disservice to what we might actually glean from the research itself. There are clearly lots of different outcomes, but equally clearly there is an opportunity to invest in Fintech in Scotland and not just preserve jobs but grow their numbers. Sadly, the reality is that the number of journalists has declined substantially in recent years and, in an understandably desperate attempt to maintain the press’s declining readerships, clickbait and sensationalist headings are not going to go away any day soon. This may not have mattered when it comes to bonking bishops, but it does very much matter when it comes to important matters of economic growth and employment. End of rant.
Gareth Biggerstaff, MD, Be-IT Resourcing