Robots are Set to Wipe Out the Highly Paying Jobs on Wall Street in the Next 10 Years

Robots have replaced thousands of routine jobs on Wall Street. Now, they’re coming for higher-ups.

That’s the argument of Marcos Lopez de Prado, a Cornell University professor and the former head of machine learning at AQR Capital Management LLC, who testified in Washington about the impact of AI (Artificial Intelligence) on capital markets and jobs.

Using algorithms in electronic markets has automated the jobs of tens of thousands of execution traders across the world, and it is also displaced people who model prices and risk or build portfolios of investment, he said.

“Financial machine learning creates several challenges for the 6.14 million people employed in the finance and insurance industry. Many of whom will lose their jobs, not necessarily because they are replaced by machines, but also they are not trained to work alongside algorithms,” Lopez de Prado told the U.S. House Committee on Financial Services.

In the hearing, officials asked experts about racial and gender bias in AI, competition for highly skilled technology workers, the challenges of regulating increasingly complex, and data-driven financial markets.

Jobs in Banking and Financial Services Sector in Wall Street

• A new report predicts that 1.3 million bank workers will lose their jobs (or be reassigned) due to automation, despite their popularity.
• Banks have already begun investing in Artificial Intelligence (AI), and identify the technology will displace workers.

Banking Jobs are one of the most hunted after for job seekers, but plenty of roles may not be around much longer.

Despite a year of disgrace that entangled many of the country’s largest banks, the desire to work at these companies remains high, according to a new report by LinkedIn. Some of the more high-profile scandals include Deutsche Bank ‘s alleged involvement in a global money-laundering scheme and accusations against Well Fargo ‘s auto-loan and mortgage practices.

However, Bank of America, Goldman Sachs, Citigroup, Wells Fargo, and JPMorgan Chase remain the most popular places to work in 2019. LinkedIn features the popularity of banks offering increasingly technology-focused jobs that attract talented software engineers and developers out of college.

“The reality is that if somebody wants to learn finance and strategy, these banks are still the best places to be trained and developed,” Heather Hammond, co-head of the global banking and markets practice at Russell Reynolds Associates, told in LinkedIn.

While job seekers are eager to work in banks at the current time, a new report exposed a million jobs in the banking industry could disappear in just over 10 years. “Job losses or relocations will impact 1.3 million bank workers in the US by 2030”, reported by British Insights Firm IHS Markit.

Currently, banking job salaries are among the most expensive in the country. Starting analysts make $91,000 in base pay while managing directors can earn almost $1 million after bonuses meaning automating expensive jobs could lead to more cost-saving. The industry could add an enormous $512 billion in global revenue by 2020 with the use of intelligent automation, according to a 2018 report from Capgemini.

While the use of AI remains thin and the technology is still basic, a boost in revenue will increase the adoption of automation, reported by Business Insider Analyst Lea Nonninger. This report also noted that banks already using AI to mimic bank employees, pre-empt problems, and automate processes. JPMorgan is cleaning thousands of databases to make room for machine learning technology. Jamie Forese, Citigroup President said in 2018 that robots could replace as many as 10,000 human jobs within 5 years.

Laura Barrowman, Chief Technology Officer at Credit Suisse Investment Bank, revealed that the company is already retraining employees whose jobs have been displaced by AI.”Globally, if you look at cyber skills, I think there is a shortfall,” Barrowman told Business Insider’s panel at the World Economic Forum earlier this year. “There is such a shortage of skills, and you need people who have that capability.”