How Much of a Threat is Automation to Finance Jobs?

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.

To address the specific point that “there’s always a need for a relationship”... sure, but there’s also at least a couple of ways automation can significantly impact that.

1. The more obvious of the two is that in S&T for example, all of the morning color notes could be much more automatic, similar to what is done in Bloomberg already in the top left of a security’s screen. If in your job you feel like you’re going through the motions, that means a machine could possibly go through those motions much more quickly. A lot of buyside people throw out most of the junk color they get anyway. Yes they keep a few good ones, but many do their own research, and the sales people here can’t NOT email, because you “have to do something.” So either get the quality of your interactions/letters up, or demonstrate the proclivity to automate, because anyone who falls in that bucket won’t be replaced by the second point, which is

2. You can still provide the same relationship tasks but with fewer people. Automation grants the ability to leverage up a star employee’s productivity. If it became possible for each top member of the group to become an expert of a new sector, or to quickly accomplish the more menial tasks like revenue allocations, then that reduces the need for the other employees, possibly to redundancy. Not enough time for people to learn new sectors or how to work with the new technologies? There could be if the rote work above is automated. Or is your knowledge too specialized that you would not have the same impact by picking up another skill? In that sense, your specialization could keep you safe for a while, but the moment your skill set becomes automatable later on, you’re no longer needed and your inability to learn new tricks has been noted.

In general, automation is coming to basically everything. Technology is not there yet for everything, but there’s no reason it can’t get there. Sure, if it doesn’t come in your lifetime it’s irrelevant, but it’s all too easy to not try to learn about it, and then be surprised how close the cutting edge really is, especially as evidenced by (thoughtless, in my mind) assertions that you can’t replace a relationship, however vague and incorrect that statement is.

In my opinion, the responsible thing to do is still do what you like, and try to be great at it. That’s just standard good advice though. If you show promise, you are unlikely to “get unlucky” on the timing from early automation because you are cheap. Maybe if there is a crisis restriction on resources like in the financial crisis this could happen, but then you could be screwed anywhere. And if it does come later, you should have had enough time to demonstrate you can work with it when it comes.

At the risk of sounding insensitive but direct, the alternative to the above is you either stay scared hide from the job you like, or instead maybe you do nothing and wait in fear until the day comes you are replaced. Then you can join the line and echo the same thoughts as everyone from my Midwestern town who was replaced by machines in their factory jobs, except you can get more sympathy for some reason because your job was from a higher class algorithm than a lower class assembly line.

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.