Is The Era of Investment Banking Over???
Claude has just launched their new tools on Investment Banking/Private Equity/Equity Research. Their tools are creating presentation slides and editing excel spreadsheets within seconds. Those who have previously worked as an investment banking analyst or similar financial position, what is your take on this? How likely is it that Claude will replace financial analyst?
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Sigma!
In a serious note what are the odds ?
dude if I know I would sell my house and either long or short Nvidia
Imo it can definitely replace work on the analyste level.
The industry itself is safe since banks don't land deals based on how good their model looks.
My prediction is less people at the bottom of the pyramid. This will materialize with smaller SA/Analyst classes.
Interesting! How many years do u think would it take the ai models to get fully integrated at banks?
People are gonna disagree but I say by the mid point 2027
I heard GS did this shit. Hopefully other banks don’t follow
At this point it's so obvious Claude is paying influencers / using bots to promote it's services, it's making me a bit more pessimistic
Well, I have heard this theory for the first time but it’s an interesting take.
Hyping up their IPO...
It's going to be a while before Claude "replaces" an analyst. Banks also can't really use Claude or any other AI for that matter with deal data. You can't feed confidential information into public AI models for a variety of compliance/client confidentiality reasons.
The most common workaround I've seen is banks trying to create their own internal AI models to combat this, which is going to take a while for them to do. They can also use claude enterprise in a more controlled environment but there are still loads of limitations around that.
There will definitely be a slight reduction in analyst class sizes but at the same time if you think about it, the average deal team generally only has 1-2 analysts. You can't just have no analysts and replace everything with AI because someone still has to monitor the AI and make sure it's right. We could see it be more common to just have 1 analyst + ai tools, but even then probably wouldn't trigger a huge amount of layoffs or jobs being cut, more like 10-20% of analyst roles over the next few years.
Point being, AI is absolutely going to change what investment banking work looks like at the junior level. But, at least for the foreseeable future, will not replace analysts entirely. In fact, if AI increases productivity, banks can pitch more and deals can move faster which will be beneficial for juniors. Regardless I think it is pointless to look too deep into it right now. If you do your job well, you'll be safe. If you're an incoming SA/FT, you have enough time to exit/get promoted to a safer role by the time it actually becomes an issue.
Great take
Great response! Love it.
I also heard a theory that it's gonna increase competition on each deal and every bank is just gonna try to get on everything like Moelis, since it makes their analyst more efficient.
If your boomer MD sends you scattered comments via mobile and thinks converting PPTs to PDFs is new age technology, they aren't going to be properly leveraging AI prompts. For all you know, they think "Claude" is a really solid French intern.
I don’t think you know what investment banking is lol
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