Navigating the transition to an automated era: the impact of digital transformation in the banking sector, particularly in terms of workforce reduction and the perception of human capital as expendabl

Over the last decade, the banking sector has undergone a significant transformation due to the rapid evolution of digital technologies. Another factor that has accelerated this shift towards technology is the recent COVID-19 pandemic in early 2020, which has forced organisations in this industry, to expedite this digital transformation process. New ways of working had to be adopted immediately, resulting in profound changes in work relationships within a very short period. Remote and flexible working became essential for the survival of banks, which could not afford to cease operating. This, in turn, led to digitalisation and increased reliance on new digital tools for collaboration and communication. Innovations and disruptive technologies such as AI, Blockchain, Machine Learning, Big Data and Analytics, Cloud Computing and RPA have enabled banks to optimise their processes and services. However, these advancements have also raised concerns about workforce reductions. As daily routine tasks that are automated in the banking sector increase, employee morale can be negatively impacted, potentially affecting organisational outcomes. This research will try to shed light on these concerns and examine whether they are valid or not while exploring the perception of Human Capital in the automated era. Additionally, the study will attempt to identify potential solutions, for better employee management by HR and offer recommendations to financial institutions on how to navigate effectively through this digital transformation. The goal is to ensure that banks remain resilient, sustainable, and thriving organisations by balancing the technological benefits while maintaining a motivated workforce in a modern, productive, and inclusive work environment.