Siam Commercial Bank (SCB) wants to offer severance packages to employees who cannot adapt to the bank's needed skill areas, its chief says.
Some employees are expected to be unable to acquire the bank's required skills, so early retirement packages may be needed to cut employment rolls, chief executive Arthid Nanthawithaya said yesterday on Facebook Live.
But the bank prefers to hone its employees' skills to sustain SCB's growth over the long run, he said.
SCB reshuffled 2,000 staff, most of them tellers, to other business areas last year. The move is in line with the SCB Transformation programme implemented from the middle of 2016.
The country's second-largest lender by assets aims to trim its employees to 15,000 by 2020 from 27,000 at present and reduce its brick-and-mortar branches to 400 nationwide from 1,153 outlets. It wants to be a leaner organisation to brace for the digital banking trend.
SCB closed nine branches in 2017, totalling 1,161 by year-end. That number has since fallen to 1,153.
Bank branches have shuttered in recent years as online transactions have seen explosive growth, rising 121% last year, while those made at physical branches fell 8%. For SCB, banking transactions via ATMs and cash deposit machines represent 57% of the total, while mobile banking generates 17% and traditional branches account for the rest.
With the downsizing plan, the bank aims to replace some jobs with machines and rotate staff to other positions that need to be filled, including customer relations for small and medium-sized enterprises and wealth management advisers. The bank will employ job rotations rather than recruiting new staff.
SCB has set a budget of 40 billion baht under its transformation programme. The bulk of that budget will be used for staff training.
It has set up a new subsidiary, SCB Academy, tasked with providing staff training, with a 10 billion baht budget earmarked for the first 1½ years, he said.
The bank generated 130 billion baht in annual revenue last year, of which 30% or 40 billion baht comes from fee-based income. Amid the digitisation drive and attendant disruption, fee-based income in the banking industry will continue to decline.
"We need to reduce costs by replacing human processes with machines," said Mr Arthid, adding that interest-based income will also be disrupted by innovative financial services such as peer-to-peer lending or blockchain.
Every member of staff, including Mr Arthid himself, will undergo evaluation during this time of transition, he said. The assessment process should be conducted on a yearly basis.
SCB's shares closed yesterday on the Stock Exchange of Thailand at 157.5 baht, up two baht, in heavy trade worth 1.19 billion baht yesterday.