Will there be a future for bankers?
It is evident that technology is changing our world quicker than we have predicted. Artificial intelligence is on the rise. In 2015 Google created AlphaGo, a computer program that beat a champion Go player without handicaps. If you got a computer that can play Go, a complicated game with lots of variations, then developing an algorithm to maximize profits in the NYSE is within sight.
In this article Ray Dalio is already trying to create an algorithm that mimics his and his co-workers investment decisions.
If successful, the project would dictate how to do everything from trading to making phone calls. It is being led by David Ferrucci, who joined Bridgewater in 2013 after leading the development of IBM’s Watson computer.
In my opinion, the future of banking seems bleak. Just like the rise of self-driving cars will get rid of truck drivers, this will seriously dampen our future. The focus now is in computer science.
Here is the video where Obama articulates his opinion on artificial intelligence and its potential. He said that this can crash the stock market or at least seriously question the integrity of financial institutions.
What are your thoughts on the future prospects of banking? I am curious to know.
Nothing you describe, even if it comes to fruition, would impact investment banking....wealth management, brokerage, sales and trading, hedge funds...maybe...banking no.
Will there eventually be a computer program that can successfully conduct a sell-side outreach process, negotiate an M&A purchase agreement and draft marketing materials...probably...but by that point so many other professions will have been replaced by robots it won't even matter. Banking at it's core is a highly personal, relationship driven business and this is the last thing AI will be able to replace.
Every year it seems like some set of ex analysts try to create a startup to automate analyst level work (basic merger or pay down models, trading comps via FactSet, etc....) and fail miserably. Perhaps we should master that before we move on to trying to replace the 20 years of relationships that an MD cultivates through robots and declare the industry "dead."
I agree on that robots cannot replace human relationships in a job, but I feel that Wall Street's golden age is over. Of course you shouldn't pick a career based on its compensation, but I noticed everything has its time period where you can strike it rich. To become rich you have do the right thing at the right time, and I feel like today's golden age is in tech.
A lot of top tier students see the prestige of investment bankers, but I think the truly smart people think for the future. Sam Altman said that the next Elon Musk will do something totally different.
The advisory side of investment banking (M&A/Capital Markets) will not be automated any time soon, as per reasons mentioned above.
The areas that will get heavily automated in the upcoming years will be the sales & trading side of the business, as market making becomes more electronically driven, and regulators push for more transparency (via electronic platforms instead of OTC) - we saw that happen to the equities side in the last couple years, and now FICC is feeling the impact.
I saw an interesting thread on the student doctor network forum about this same topic in the context of banking; it describes the types of career paths that people trained in business and finance can take within the pharmaceutical industry per an interesting video by the physicist Michio Kaku discussing why Trump was elected and the Brexit occurred.
To answer your question, automation will relieve a significant percentage of banking positions, IMO. However, like your quote from another thread "The harder you work, the luckier you get" that I've heard before in the movie Empire of the Sun, where a British banker in Shanghai says the same thing to his son before Japan [automation, job-outsourcing, etc] invaded during WWII, pursuing employable degrees at good universities and working hard will prevent you from being replaced or outsourced.
I think medicine is also likely to get automated, the diagnosis/patient care side and robotic surgery. There actually already are robotic surgery tools.
Obama said that a 25 year old kid showed him a platform where it can better determine the illness than radiologist. Also, billionaire dollar valued start-up called Oscar founded by a bunch of Harvard MBA guys are already working with talented engineers doing many innovations through its huge financial backing. Though the news says its bleeding money, that may be a good thing; and you can't trust the news either.
Man, the future is scary.
Never underestimate the government's aptitude for regulation
Show me the algo that sits down with clients
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