Banking sector job losses to intensify in 2021
MORE job losses are looming in the banking sector as the sector intensifies the digitisation process in 2021 businessdigest has learnt.
Digitisation is expected to result in more closure of bank branches in 2021.
Last year, more than 300 employees lost jobs across the sector, with at least 25 branches having permanently shut down since 2019 as banks streamlined operations with digitisation becoming a core part of banking systems.
Outlining prospects for the banking sector on 2021, Bankers Association of Zimbabwe president Ralph Watungwa told businessdigest that the sector was developing strategies to ensure that the affected people would be absorbed into other sectors of the economy.
The hope is that the economy would improve buoyed by improved agricultural activity which is also expected accommodate the redundant employees.
“We think that in terms of trends, something that was negative will continue to take place. That is digitisation of the banking sector.
We are looking at less branches and more digitisation which will lead to the realignment of the banking sector. That is an exciting journey and we continue to think about how we protect jobs because that will make people redundant. That is also the reason why the economy has to grow to absorb them,” he said.
“So in other markets where that is happening these people normally find their way into other sectors of the economy. But in Zimbabwe because of the general economy’s poor performance, these people do not have alternatives to go to,” he said.
Watungwa however added that by virtue of the employees being well trained it was not too difficult for them to be absorbed elsewhere adding that the sector was offering high retrenchment packages above the regulatory ones to ensure that the employees did not struggle.
Watungwa said prospects were bright for the banking sector in 2021 despite the impact of Covid-19 and general economic shocks. “I think banks are optimistic that the agriculture sector will support the economy and we believe we may actually have one of the highest harvests in the last 10 years due to the rainfall patterns.
“We then believe the economy from an agricultural point of view will be very strong. We’re also praying the commodity prices for goods that we produce particularly chrome, gold and platinum remain firm, because that will drive the economy going forward,” he said.
Watungwa said the focus would also be on meeting the capitalisation level by the end of the year against the backdrop of Covid-19 limitations and current economic challenges.
The grey listing of the Zimbabwe financial systems by FATF (The Financial Action Task Force) and the EU and stiff regulations for mobile operators now means that they no longer have the capacity to disintegrate banks as customer due diligence can now be done more formally.
“That activity should be seen to improve our requirements with FATF financial institutions which will continue to support the foreign currency auction system put in place by the Reserve Bank of Zimbabwe in June last year to stabilise the exchange rate and improve foreign currency availability.
“So I think the banks will also support the auction system. If we continue to instill transparency that has been demonstrated so far at the auction, the rate will continue to be stable helping to stabilise the gains that have been recorded in Q4 2020,” he said.