The robots are coming for our jobs, and Wall Street is getting a little nervous.
A recent survey of 1000 financial professionals conducted by LinkedIn, the networking site, found that 25% of Wall Streeters are worried their job could be jeopardized by automation. Retail bankers are the most fearful with a third of respondents saying they view automation as a threat, according to a report highlighting the survey’s results.
It stands to reason that some folks are nervous, as Wall Street firms look to automate their infrastructure to cut jobs.
As one survey respondent frankly put it, “automation will continue to reduce the number of jobs in finance.”
Citigroup is staffing up for the automation revolution. The New York-based financial services giant has plastered online jobs boards advertising roles for a new automation center that will deploy new robotic technology throughout the bank.
JPMorgan, which is spending big on technology as it looks to cut costs and increase efficiency, last year launched a predictive recommendation engine to identify those clients which should issue or sell equity. And now, given the initial success of the engine, it’s being rolled out to other areas.
And at an event in January, Goldman Sachs’ deputy chief financial officer Marty Chavez said the bank was focused on automating investment banking tasks. He said that the bank has mapped out 146 distinct steps in the initial public offering process, and that many of these are “begging to be automated,” according to MIT Technology Review.
Not everyone is worried about the ongoing wave of digitization sweeping Wall Street, however. For instance, 43% of those surveyed from the wealth-management industry think fintech is overhyped.
“Financial advisors/wealth managers lead the charge on thinking that there will always be demand for traditional financial services, whereas interest in fintech will rise and fall (43%, compared to 29% overall),” the report said.
Wealth-managers say that demand for human interaction in their space will protect them from automation, according to the report.
A big note on financial technology by Morgan Stanley penned by a team of analysts led by Giulia Aurora Miotti supports this notion that humans are safe in wealth-management.
“The financial sector consumer often needs some sort of human contact, especially when abrupt market moves lead to unexpected losses,” the analysts wrote.
As such, they expect firms that follow a hybrid model of financial advice will be the best positioned for success in the wealth-management space moving forward.
The so-called cyborg or hybrid model refers to a financial advice platform that pairs algorithm based financial planning with components of human interaction. It’s essentially financial advice with a human face and robo insides.
Betterment, a firm many consider the poster child of robo-advice, provides a recent case study of the industry-wide shift towards hybrid financial advice. Earlier this year, the firm responded to this desire for human help by rolling out new hybrid services that pair human help with its computerised financial advice.
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