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8 Hartford Business Journal • June 11, 2018 • www.HartfordBusiness.com By Gregory Seay gseay@HartfordBusiness.com C onnecticut's financial- services sector, covering banks, investment firms and insurers, continues to shed jobs as providers try to keep pace with consumers who pre- fer to remotely bank or file claims using smartphones and other digital devices. Employment data from the state Department of Labor shows the financial-services industry shed 600 jobs in April, while the number of people employed at local banks, invest- ment firms and insurers is down 13.5 percent since Jan. 2007, indicating the sector has never recovered from the Great Recession. The industry employs 107,600 people today, or about 6.4 percent of the state's total workforce, DOL data shows. Meantime, manufacturing and health care are among a handful of sectors confronting the opposite chal- lenge: a shortage of qualified labor. Stepped up factory hiring across America was a major contributor to the nation's strong May job growth, adding 223,000 jobs and cutting the U.S. jobless rate to 3.8 percent. Bankers, insurers and economists say the employment contraction in financial services is being significantly impacted by the state's overall slow- moving economy and the adoption of new technology, which permits banks and insurers to process just as many car, mortgage or home-equity loans, or file property-damage claims as before, but with fewer staff. Indeed, some banking experts, in- cluding former Citigroup CEO Vikram Pandit, predict the industry will shed 30 percent of its jobs, or more, in the coming years as technology advances and becomes more prevalent. Susan Winkler, a former banking and insurance executive who is vice president of MetroHartford Alliance's financial-services cluster, ascribes the shrinkage of traditional banking and insurance jobs to two factors. "First, we've got a transformation in the way we work,'' Winkler said, refer- ring to the information automation, artificial intel- ligence and digi- talization that is replacing human skills for cus- tomer sales and support, informa- tion technology, even marketing. "Second is the aging workforce,'' Winkler said of Connecticut's graying talent headed for retire- ment or sidelined by health issues. But amid their jobs decline, Winkler says financial services is gaining jobs in certain cat- egories, such as banking and insurance analysts, risk assessment and regula- tory compliance. She points to the rise in jobs postings that require both hands-on and analytical skills. "The industry is being fed differently with talent,'' Winkler said. For banks, the picture is pretty much the same, she said. However, banks have succumbed to competitive pressures over time and outsourced many of the tasks they once did inter- nally, such as auditing/accounting, and data/information processing. Connecticut's 41 federally insured banks employed 14,872 full-time work- ers at the end of March, according to the Federal Deposit Insurance Corp. "The keyword is 'ultra-competitive,' '' said New Haven economist and bank- ing adviser Donald Klepper-Smith, of DataCore Partners. Klepper-Smith said banks' shrinking payrolls reflect the pressures of vying for thin returns on loans and deposits in a state that has barely recovered eight in 10 jobs lost in the Great Recession and whose population continues to suf- fer outmigration. "What you have is a situation where technology is also playing a role,'' he said. Because of customers' embrace of digital banking, Farmington Bank, for instance, now has only a handful of staff in each of its 25 branches in Con- necticut and western Massachusetts vs. seven or so previously, said CEO and President John Patrick Jr. "I don't think the jobs are going other places,'' Patrick said. "We're just work- ing smarter with newer technology.'' The ascendance of a number of Hartford area financial-technology, or "fintech,'' providers plying their services to financial institutions across Con- necticut and New England, too, is having an impact. They offer algorithm-based digital solutions to help banks meet their Shrinking Sector Shifting habits, technology, stagnant economy diminish CT's financial-services jobs Susan Winkler, Vice President, Financial- Services Cluster, MetroHartford Alliance The Hartford has launched a claims-handler apprentice program, to beef up its claims staffing. HBJ PHOTO | STEVE LASCHEVER PHOTO | HBJ FILE Farmington Bank Chairman, CEO and President John Patrick Jr. says technology allows his 25 branches to serve customers with fewer workers.