How Much of a Threat is Automation to Finance Jobs?
Recently had lunch with someone in S&T who warned me against pursuing certain careers in finance, particularly S&T, because of the likelihood that automation/AI would replace a significant amount of jobs. I've seen a few forums claiming exactly that dating back several years, and articles like this one and this one pop up every couple of months.
It seems like there's plenty of evidence that banks have embraced automation and this trend will continue. But I'm a bit skeptical that it will actually be a colossal hit to employment for a few reasons. You obviously can't automate the relationship aspects of certain finance jobs (at least not yet), and if anything ever went wrong people may irrationally jump ship on certain AI programs simply because they don't trust it as much as a human. Most historical events of automation have just shifted employment to new sectors, and this study out of Australia indicates that automation in finance jobs will really just shift the skillsets needed by human employees and create more jobs than they replace. That being said, I don't work in the industry and am curious to know what people who do think.
Anyone have any thoughts on this?
Agreed. Not just sales & trading but middle and back office, as well. I read an article last year and it said the financial industry is #1 industry right now for having the most automation done, more so than tech, itself. I've worked at number of firms on the street and I'm seeing a pattern where management decides to streamline a lot of processes and having Broadridge come in and swoop up many back office jobs to hire them and send them to Newark, NJ or India. Middle office jobs, although harder to automate, are being moved to cheaper areas, for example, Whippany, NJ will be destination for Barclays. As for Sales & Trading, equities been on decline, we all knew that... I.E: Program traders / high touch desk will eventually be redundant and will be replaced by the algo desk. Numbers have (Seen traders being let go, in person, on the floor) or will surely continue to drop. The trading floor isn't lively as it used to be. I've read an article that banks are trying to automate the sales desk, though I haven't seen this yet. The sales desk sits literally in front of me and although they aren't busy as the traders, I don't think how this is possible. Regardless, automation will be topic for many years and I don't ever see us going back to the hey days. My advice, make yourself relevant by keeping yourself educated by continuously learning new products and being resourceful to the desk and management when they need a go-to person, network efficiently and last but not least, learning to code.
Much more likely to have a greater impact on S&T than, for example, FO IB roles. The reasons are pretty intuitive (i.e., required level of interaction between parties, nuance, extent to which standardization is possible, regulatory hurdles, etc.). I don’t think that should deter you from pursuing a career in S&T, though; these things don’t happen overnight, despite what code monkeys might have you believe.
Starting to see this in the lower end of commercial /business banking on the credit / underwriting side of things.
I’ll be working on an upcoming “project” where I have suspiciouns that shit is about to hit the fan.
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I think the safest route as a trader is to focus on commodities and be ready for the smooth and horizontal transition to selling beets at the local farmers market.
or selling "beats" to jigga
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