Anthony Jenkins has spent the last two years predicting that an ‘Uber moment’ will bring an end to the traditional model of banking. The former CEO of Barclays is even putting his money where his mouth is. He now runs a financial technology (‘fintech’) venture and recently joined the board of the digital currency start-up Blockchain.

Jenkins’ hypothesis: that agile and data-savvy technology companies, aided by machine learning and artificial intelligence, will inevitably find ways to automate banks’ processes. In doing so they will steal those banks’ customers and put their employees out of jobs.

Whether you think Jenkins’ predictions are honest, or intended to build his business case, there is undeniably a socialist angle to the question of increasing automation in banking and other financial services. While financiers may not top the sympathy list when they face job cuts, the impact on them and wider society could be huge.

Studies routinely put the number of people employed in finance or related professional services in the UK at over two million. While London accounts for the greatest share, there are also large banking hubs in Edinburgh, Manchester, Birmingham and Leeds.

We should therefore be vigilant of the potential repercussions from computers squeezing out large numbers of bank employees. This trend will not only affect the finance industry but also the wider service economy. The term which some people apply to this trend, the ‘Fourth Industrial Revolution’, illustrates both sides of the coin. While technological advances may represent increasing efficiency, they often squeeze out the incumbent labour force.

Take one example. Last year the Competition and Markets Authority (CMA) told nine high-street banks and building societies that they must draw up common standards for sharing current account data with fintechs and other competitors by 2018. These common standards (known as ‘Open APIs’) already exist in other sectors. They are most notably the reason why Uber can make use of your location data via Google Maps, with the implications for black cab drivers, and how websites like SkyScanner access up-to-date flight information, thereby muscling out traditional travel agents.

Once this current account data is opened up, it will become more amenable to big data analysis and machine learning. Fintechs and a new wave of ‘digital banks’ could develop microscopic insight into your income, spending and savings habits.

The logical conclusion is that all this could lead to increased automation in operations and even decision-making. The implication for the labour force could be that the bulk of mortgage advisers, underwriters, credit and arrears managers could be squeezed out of retail banking altogether.

In other parts of the financial world, blockchain technology could mean the stock market no longer needs human auditors to verify trades or custodians to make sure that investment funds hold the shares they say they do. We are already seeing algorithms give human asset managers a serious run for their money.  

In the scheme of things, full automation of financial services is still quite far down the line in the digital revolution. Nonetheless, according to a recent prediction by Citigroup up to 1.7m jobs could be lost to automation over the next decade at US and European banks alone.

When traditional blue collar jobs in manufacturing were lost to automation, the policy response was to adapt our workforce for the service economy. Given recent events it’s debatable whether that has been a political success.

Yet what is the correct policy response now? Is everybody suited to becoming a computer programmer and sharing in the spoils, or do we just accept that the owners of technology companies will become ever richer off the back of automating their workers out of the business?

I was interested to read about a few of these technology and data companies getting together at the 2017 Davos World Economic Forum to discuss these very issues. Companies like IBM, Microsoft and Salesforce are technology firms today, but these and other companies like them may also become the banks of the future.

Concerned about the populist wave currently ‘coming home to roost’ from the automation of previous decades, they warned about the social effects of vast inequalities created by technological advance. Marc Benioff of Salesforce reportedly warned that Artificial Intelligence could create a wave of ‘digital refugees’. This must be natural territory for Labour.

Charlie Blagbrough is a Young Fabian Member. Follow him on Twitter at @CharlieBlags