Thomas Cook has a lesson for our banks
The collapse of Thomas Cook, the world’s oldest travel agency, which left 150,000 tourists stranded all over the world, was a result of bad management, accumulation of bad debt, reduced demand for the northern hemisphere’s summer holidays, concerns over Brexit and, most important, the shift from the traditional travel agency to self-book holidays on digital platforms such as Airbnb and Booking.com. The digital revolution is not just threatening the travel and tourism sector, it is creating an existential crisis for other industries, also banking. This week the labour court granted bank bosses an urgent interdict against a strike by Sasbo. The union wanted its 50,000 members to strike on Friday in protest against retrenchments. Restructuring at Absa affected about 800 people; Standard Bank is closing 91 branches and laying off staff; and Nedbank was in talks with 1,500 employees over possible job cuts.
Banking has changed and this has a negative effect on employment. People prefer to bank on devices, using a myriad of apps and other digital solutions that have put control of our bank accounts at the tips of our fingers.
But while bank employees and their unions must understand that the digital march is irreversible, banking executives cannot absolve themselves by blaming tough conditions on the fourth industrial revolution. Before resorting to job cuts, why can’t they first look for savings in other areas, starting with their gigantic pay packages? Capitec’s Gerrie Fourie earned R56m, Mike Brown of Nedbank R53m, Sim Tshabalala of Standard Bank R49m, Maria Ramos, formerly of Absa, R29m, and Jacques Celliers of FNB also R29m. And that was just in 2018. How many jobs could be saved if the bosses shaved a few million off their obscene remuneration packages? Fourie can argue that his Capitec Bank is bucking the trend. It’s not closing branches, instead incorporating self-service stations within them to cater for those among their 12-million clients who don’t have smartphones or tablets. It is also recruiting, not retrenching. There are good lessons from the Capitec success story. Overall, however, banks and their employees need to meet halfway if we are to avoid a Thomas Cook-type of collapse of one of our major banks.