Future of FO Jobs and Automation
I am a freshman in college and I am interested in getting a FO job at an IB (BB, MM, or Boutique) but I have recently been concerned about the future of junior roles with automation popularizing..... What roles do you think in FO will be removed and how do I better prepare myself to be useful when automation hits full swing at IBs? Thanks!
huh why did I get shit on?
I would recommend learning what exactly an FO role is first...
Correct me if Im wrong, but I thought most junior roles in front office were not actually client facing and more on the financial modeling side?
Right . You can’t make reasonable financial models in programming languages . Python is only better than excel for analyzing certain types of data (stock/option/bond market prices ) or credit information for thousands of customers. It’s relatively useless for making DCF/LBO and computer printouts are not visually appealing. For Equity Research, fundamental analysts are always going to exist. Yes quant research is growing but it is limited by the fact it doesn’t take into account business specific decisions or qualitative reasons for a pricing change like a fundamental analyst would. Similar for HF. PE required business acumen.
to put it briefly, IB roles mainly revolve around client interaction. Banking is about helping clients do what they want to do, not working with data. This is by nature not vulnerable to automation. If anything, MO and BO roles of basic data analysis are slightly more vulnerable. I’m assuming you just mean IB
BO will get automated, MO is at risk of automation and FO is currently not at risk unless you're talking about S&T. Hope that helps
Switch BO and MO. BO are the ones automating, maintaining and developing the needed software, thus I doubt all of it will get automated. MO lacks the client part of FO as well as the pioneering part of BO. Thus it is at highest risk of automation.
Couple threads on this already recently on both automation and offshoring, suggest you take a look. In short, IB proper won't disappear (though technology could allow teams to be more flexible in becoming leaner if need be) because it's a relationship and experience-driven business and you need a pipeline of analysts to become MDs.. but that doesn't mean you shouldn't study data science and keep up to date with technology.
Great answers, thank you for your guys help putting me at ease!
Well breaking into FO is easier said than done (Assuming you don't have strong family connections).
Currently sitting on a treasury desk with a bank. From years of being in this industry, the only way for roles to be automated and to be accepted by the banks is for fin tech firms to comes and give no doubt and reassurance that whatever processes they take over, it won't blow up in their face. Let me give you an example, broadridge pretty much swept up back office. Startups like symphony chat are trying to come in and find ways to automate sales but they have a long long way to go.
Hey mswoonc, seen you post a lot on here...I’m a first year at a BB on the S&T side...going into this path I heard lots about automation, overall efficiency and trading going to robots, I’ve been here for a few months now so I’m still a long way from being someone with valuable insight but even at my junior level - I still feel like I’ve found plenty of bottlenecks and less than seamless aspects of our floor which I’m surprised exist even in 2020, and this is at a bank with a huge balance sheet and market share.
Frankly, my expectation from what I’d read here and seen in the news before starting made me feel like I was way behind in terms of my technical skill set required to be successful, I sit on a flow desk in equity derivs and still feel like for my entire product group (trading / sales / structuring) to all be done away with is still some ways away. Heck, half the reason I landed in my pod was because my seniors felt they could use another hand or two in the trenches.
Any thoughts on if automation is overblown, to an extent on this website? Seems like a lot of the IB and college demographic chime in on this matter and it’s not something fully in their realm to begin with.
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