Robots on Wall Street: What Automation Means for the Financial World
A quick Google search for, “Robots on Wall Street,” will yield an interesting mix of results. Some articles warn, “Robots
A quick Google search for, “Robots on Wall Street,” will yield an interesting mix of results. Some articles warn, “Robots Are Coming,” while others go a step farther; “Robots Taking Over Wall Street.” On the flip side, some soothe fears, assuring, “Robots are Not Taking Over Wall Street.”
So where does the truth lie? As usual, somewhere in the middle. Automation is most certainly coming for Wall Street; in fact, it’s already here. But humans are looking for a way to coexist with their computerized counterparts, to offer the most seamless experience possible for financial clients and Market interactions.
From Minor to Major Jobs, the Robots Have Arrived
Most online banker customers have already experienced it; a virtual assistant offering to help with minor transactions. And on Wall Street, commercial virtual assistants are helping larger-scale clients perform financial exchanges.
Bloomberg explored what the advent of robot exchange workers means for Wall Street.
Robots Specialized for Wall Street
The art of teaching computers to think like humans is called artificial intelligence research. With A.I., robots are better equipped to respond to human customers in a way that is familiar and effective. On Wall Street, one of the most common applications for A.I. lies in administrative tasks like communicating with customers over financial transactions, and logging data.
Which Jobs are The Most Likely to Become Automated?
Because robots are so successful at performing administrative duties, that’s likely where the first jobs will be lost. Per Bloomberg, “The first to go will be those with roles that are repetitive in nature: support functions, back-office processing, producing reports that rely on structured data. More than 50% of tasks performed by loan officers, financial advisers, bank supervisors, loan clerks and tellers could be automated or augmented by technology by 2025, according to Accenture. In capital markets, more than half of the work done by financial analysts, sales agents, brokerage clerks and statisticians could be automated or augmented. Headcount for more prestigious front-office workers — such as traders and investment bankers who produce revenue — could drop by almost a third, according to McKinsey & Co. JPMorgan Chief Executive Officer Jamie Dimon said the company is evaluating which of its jobs are most susceptible to being lost through AI so that it can retrain its workforce.”
What Other Risk Do Robots Pose to Jobs?
Because so much of investment and market exchanges comes down to number crunching and monitoring stocks, these are jobs that are also at risk. While considered to be a highly-trained career that requires skill and intelligence, robots will eventually be able to perform the same calculations in a fraction of a time, so investors and portfolio managers are eyeing the robot advance warily.
The Good News
There is some good news tucked in between the concern about job loss to automation. A.I. programmers, engineers, and data scientists are increasingly in-demand positions. With high-profile companies looking for ways to streamline their automated services, the void of skilled investors and portfolio managers will soon be filled by those with careers in software programming and other specializes sciences.
The Human Element
Despite the benefits that come with the used of automated software like speed, relatively low cost to maintain, and accuracy, robots cannot replace the human element. Those working with large sums of money want to trust the people on the other side of the desk, or the other end of the phone. It’s hard to build a relationship with a robot, and empathy is something programmers haven’t figured out how to imitate. Because of these limitations, it’s unlikely that robots will replace human workers on Wall Street entirely. At least, not yet.
Automation is a serious concern across many industries. There are few jobs performed by humans that can’t be performed better by robots. With the exception of careers requiring understanding, empathy, creativity, and humor, many jobs will eventually face the possibility of being replaced. Businesses and countries as a whole will have to grapple with what it means to replace working humans with robots, and what it means for the big picture of society. In some countries, governments are exploring Universal Basic Income (UBI) which would provide a flat monthly stipend to all citizens. In a world where jobs are scarce due to rapid automation, this may be the only way to stave off significant suffering. Watching Wall Street make the turn into a more automated system will provide a roadmap for other industries considering making the change.