The Robots Are Coming for Wall Street

No way robot would take jobs from bankers. Computer programs may reduce the demand of junior bankers but senior bankers are essentially salesmen. The day that AI is smart enough to do sales (arguably one of the most "human" things) is the start of Skynet.

At the back of my mind while reading this article I was thinking senior bankers in advisory would surely be the last to go, which is why I was puzzled at this part:

"The next ‘‘tranche,’’ as Nadler puts it, will come from the employees who deal with clients: Soon, sophisticated interfaces will mean that clients no longer feel they need or even want to work through a human being."

I guess the hierarchy would start at VP, while the analyst/associate roles are automated or outsourced.

Imagine being interviewed by a robot for a job on the Street.

Robot:"Why Sentinel Advisors?" You: "Mainly because of their.." Robot: "Could not understand interviewee code 65. Please try again next year. Goodbye."

I guess my joke wasnt all that funny lol

I think our real substitute is not the machine but the small number of Engineers and PhDs having asymmetric knowledge of how to create, operate and control them and replace vast numbers of people. In short like how that article and the book 'Rise of the Robots' says, unlike the Industrial revolution, where multiple jobs were created in the Manufacturing and in the Supply chain, there is now a trend towards consolidation of jobs in the hands of the few. Furthermore, making all the other degrees redundant and forcing the people to study only Engineering/Computers will not help either as the virtual world is a "Red Ocean" it can support only a limited number of firms which leads to limited competitors and finally Oligopoly and the people who are required to work in these smaller firms are lesser than the average for other sectors.

This "Uberization" is going to cause massive social upheaval and an unholy and vicious race to the bottom for scarce jobs. I am not at all optimistic that many newer jobs can be generated even if we train the people.

Has anyone read "The Future of the Mind"? After reading that book I really believe that we are really far off from replacing a lot of jobs with AI. Guys that write articles like this are just trying to write an article that will get a lot of reads and generate a buzz to benefit only themselves.

I'll provide a brief anecdote here, and perhaps someone will find it useful. when I was a student (and I've only just graduated) I decided to pick up a little python, a little R, and eventually a very good knowledge of C++. As I began to explore more complex methodologies for pricing and trading, I realized some of these systems (like artificial neural networks, for example) were incredible pricing tools. When I realized I was actually creating an edge for myself, I of course highlighted those things on my resume and worked on blogs and such with people all around the world on new ideas. Professors knew what I was up to and I worked with them as well.

When I started contacting prop shops, hedge funds, and the usual L/S crowd trying to network, they were all incredibly interested in my programming knowledge. I mean, I am not some genius programmer, but I can hold my own because I know how to blend the science into an art. The point I am trying to convey is that it is a tremendous advantage to program. It is in high demand and even if they don't want you to be an algo, or a quant trader at all, interviewers are still interested. If you can't beat the robots, just join the robots!

Anyway, I can't imagine that the entire finance world will go away as a result of 'robots', but I think some jobs will...

One thing I always found odd in college was that accounting majors always (without fail!) told me that their job couldn't be automated. I would think lower level accounting, which merely references numbers/terms and reconciles accounts, could be automated, but what do I know...if there are any accounting persons here, I would be interested to hear what you think.

-berg

http://waitbutwhy.com/2015/01/artificial-intelligence-revolution-1.html

For starters for those that didn't actually read the article (which is obvious a lot of people didn't based on the comments) they AI and job loss of more focused on quants and their function of extrapolating data doing statistics. It is not referencing IB.

I tend to agree in that its hard to predict what will really happen but just when people in this board were clamoring several years ago about Analyst/Associate job loss to India outsourcing, I didn't and don't see this happening on a huge scale. Jr. ranks can use these programs to gain efficiency and dedicate their time to more valuable areas.

I've also never agreed with the whole concept of the Sr guys are protected but the Jr guys aren't. In order to become a Sr guy you need to have a been a Jr guy. Jrs not only serve the tool of work out put but its also the training ground for the next generation of leaders. If you replace tons of Jrs with programs no one will be around to become the Srs. You need a large pool for this transition. Not everyone has the desire or skillset to move up the ranks so materially shrinking the Jr rank would have negative consequences. This is a point that I can't reconcile and why I'd be less concerned with massive job loss within lower ranking service provider roles.

CircleUp is disrupting PE investing

http://www.wsj.com/articles/software-is-disrupting-venture-capital-sect…

Another thing to ask is, what happens to consulting firms that tend to work on an hourly billing basis. The whole pricing model is going to have to change if we eliminate the large need for busy work. It's going to be so weird when i get out of the military in 10 years, the whole land scape is going to be completely different. Banking might not even be a viable option when I come out. Maybe i'll be selling the military equipment we need to fight skynet by this point haha.