The Royal Bank of Scotland is preparing to shed 550 jobs as part of a plan to replace staff who offer investment tips with so-called “robo-advisers”.
RBS, which is 73% owned by taxpayers, is shrinking its investment advice team by making the service available only to people with more than £250,000 to invest.
Some 220 jobs are expected to go in the division, with a further 200 to follow in its protection team, whose staff offer advice on products such as life insurance.
RBS is instead planning to launch a new automated system that will offer customers advice based on their responses to a series of questions.
The move is part of an effort to cut costs after the lender racked up its eighth successive annual loss in February, when it fell £2bn into the red.
It is also a response to the retail distribution review, an overhaul of financial regulation introduced in 2013 that made it unprofitable for banks to offer investment advice to customers with less to invest.
“We want to help as many customers as possible invest their money in the right way for them,” said a spokesperson.
“The demand for face-to-face investment advice is changing. Our customers increasingly want to bank with us using digital technology.
“As a result, we are scaling back our face-to-face advisers and significantly investing in an online investing platform that enables us to help a new group of customers with as little as £500 to invest.”
It comes after RBS learned that it could face a new lawsuit from small business owners who say they were driven under by its global restructuring group (GRG), which handled business customers but has since been shut down.
The RBS Litigation Group (RGL) said it had “raised funds to begin the process of building legal claims against RBS”.
“Owners of SME businesses damaged or destroyed by the actions of GRG have been looking for a group to take their claims to court and win compensation for their losses,” said James Hayward, chief executive of RGL.
“Those who have suffered were not financial institutions or fund managers, but ordinary hardworking people.
“RBS’s actions have destroyed businesses, livelihoods and in many cases the lives of their owners, so I am delighted we have funding in place to begin the process towards taking action against those responsible.”
The group has hired Enyo Law to advise on the claims.
“We believe we have a strong case and will defend these claims vigorously,” an RBS spokesperson said.
This article was written by Rob Davies, for theguardian.com on Sunday 13th March 2016 18.36 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010