A dark cloud is hovering over the banking sector as financial institutions are shutting down branches as a cost-cutting measure as they embrace digitisation, rendering hundreds of workers redundant in the process.
More than 300 employees have lost jobs across the sector, with at least 25 branches having permanently shut down since 2019.
Zimbabwe has become highly informal, leaving the formal employment rate at just 5%, making it difficult for workers who lose jobs to be absorbed in other sectors of the economy.
The job losses are worsened by the shrinking of the financial services sector amid changes ushered in by a technological revolution which is replacing human labour, posing a gloomy outlook for workers who risk retrenchment.
There have also been misgivings in the market on the impact of the branch closures as the e-channels being adopted, based on internet banking and technological apps, may not necessarily offer better utility than, for instance, the ordinary USSD platform.
Businessdigest understands that Cabs, Standard Chartered, FBC, FCB (formerly Barclays) and CBZ have shut down around 25 branches since last year, with a voluntary retrenchment scheme at Standard Chartered alone having claimed 55 jobs.
On Tuesday this week, FBC told its customers it had temporarily shut down its Southerton and Chitungwiza branches, urging customers to rely on e-banking or other branches in Harare.
Analysts say although digitisation should be celebrated as it modernises the financial sector in line with global best practice, there are many challenges.
Bankers Association of Zimbabwe (BAZ) president Ralph Watungwa this week told businessdigest that the problem is that the troubled economy is hampering the banks’ good intentions.
“The issue of employment is not necessarily a banking issue but a country issue where industry should have been developing enough to accommodate the redundant people from the sector. Through digitisation, some industries will be growing, for example those that supply the USSD platforms. Ideally, in a normal economy you do not see redundancy. They would go to other industries that would be growing. Our problem in Zimbabwe is that no other industry is growing and therefore it has a negative impact as those that are made redundant in the banking sector may find it difficult to find alternative employment. The good news is that most of these people in the banking sector are very sophisticated thus are employable. He said Standard Chartered only has four branches in the whole of UAE (United Arab Emirates) and because the economy generates jobs no one complains,” he said.