I feared for my life, now I fear for my job
In late October of 1996 the American publics’ awareness and fear of artificial intelligence was cultivated on a grand scale for the first time. “The Terminator” had just released and the idea of a nuclear holocaust caused by an AI system with a cold disdain for human life was a new and scary concept. Similar to the present conversation on this technology, people discussed its many implications, usefulness, and most importantly its dangers. The fear of unnatural problems being caused by a computer capable of its own brand of critical thinking is still prominent today, the main difference now is that instead of fearing for our lives, we fear for our jobs.
In the modern jungle that is corporate finance, a new pride of lions has has come to stake its claim to the prey. The tech industry has spread its roots into almost every division of the modern finance industry and its young, handsome, and dashingly quick thinking brainchild; AI, is taking up a lot of space. Unfortunately for those prideful tenured inhabitants of fortune 500 companies and investment banks alike, there is not enough food for everyone and soon natural selection will begin to eliminate the weak. An increasing number of roles traditionally filled by human occupants are becoming automated and the people who once filled them are being left without a job. All the result of cost saving optimization initialized by the king apes of upper management, you have to wonder how much honesty was behind that employee appreciation retreat back in march. I mean the open bar & free hot stone massages were great, and you really felt like you connected with Pam from HR, but 50% of the customer service department getting layed off a month later?… that leaves a bad taste in your mouth.
All of this probably leaves you asking a lot of questions about AI, but I’d guess that the one to trump them all is this:
Is my job really as secure as I think it is and could I be replaced by Artificial Intelligence?
The best answer to this question is that it depends; on a lot of different factors. But don't worry, its not as foggy as that answer may make it out to seem upon first glance. Although there are many different things that can affect your job security through the advancement of technology, the main one is going to be what department you work in.
Front office customer service jobs are going to be at the highest risk for getting bumped out in coming years, and this is mainly due to the recent implementation of chat bots. Although this technology is relatively new in finance and is technically still under the aura of a research and development phase, there are already some large scale regional financial institutions using it. An example of this is Dukascopy Bank, a commercial & retail firm based in Geneva, Switzerland whose goal is to become the leading online and retail bank in its region. In an article about the Banks implementation of AI chatbots on the frontlines of customer service, it becomes obvious just how widespread the threat of job security posed by this technology has become:
“Dukascopy Bank’s ChatBot is an ordinary chat between the Bank and its clients. It allows the client, in a natural dialog form to access any service, which the Bank provides including payments by bank transfer, currency exchange, instant payments, instant issuance of virtual cards and ordering of plastic cards, top-ups of those cards, instant top-ups of client’s cards issued by other banks’, investments in financial instruments, purchase and the transfer of CFD contracts on Bitcoin. In the near future, the Banks’ ChatBot will be able to process transactions in other cryptocurrencies, as well as investments in stocks. In prospect, access to private banking services will be added.” (Kirilova, 2018, p.1).
From that information alone, many bank tellers, customer service representatives, financial planners, personal stock brokers, and other people employed by a client based position may be threatened. Others may blatantly deny the ability of a robot to do their job, which is also understandable. Although the wide cross section of capabilities that AI possesses for use in the finance industry is adversarial to many honest livings, not everyone is threatened. There is and will always be a need for client interaction somewhere in the mess. Particularly, large scale deals are less threatened by AI technology such as chat bots. A hedge fund manager is never going to want to break a hundred million dollar deal with an investment bank through a chat bot and a corporate wealth manager is not going to want to spend their companies retained earnings on a futures contract suggested by anyone other than his most trusted portfolio manager.
The front office isn’t the only place under fire
Back office jobs, such as market research, data analytics, and quantitative modeling are arguably in as much if not more trouble than the customer service reps. In a well researched book written by Moloi Tankiso, a renown finance expert and professor at the university of Johannesburg, he states:
“we point out that it has been established that artificial intelligence can be used effectively as a prediction tool. Given this, we pointed out that in their attempt to clear future uncertainties so that sound decisions can be made, agents use predictions as an input into the decision-making process. In this regard, economics and finance theories would have provided a framework in which agents make these decisions on how to allocate scarce resources” (Tankiso 2020)
The application of AI as a predictive modeling tool is scary for any quant, analyst or data jockey working in finance & economics. Although it may take years, the growth rate in machine learning is exponential and soon we could see young professionals with 6 figure salaries getting run out of the office by an excel or python bot.
So where does all of this put you?
This really depends where you are on the totem pole of client based interaction. There are some things a robot just cannot do (yet). Robo-advisors, virtual tellers, chat bot customer service representatives? If you make a living as a human in one of those positions, and don't deal with institutional clients, you may want to form an exit strategy. On the other hand, if your an investment banking director, a tenured private wealth manager with a corporate pedigree behind you, or someone whos job description incudes more than covering the basic front end services of the finance industry then I think its safe to say you can relax…At least for a little bit.
REFERENCES
Valentina Kirilova (2018). Dukascopy Bank wants to become an artificial intelligence hub. https://www.leaprate.com/forex/technology/dukascopy-bank-wants-to-become-an-artificial-intelligence/. Leaprate.com>Forex>Technology
Moloi Tankiso (2020). Artificial intelligence in economics and finance theories. https://search.lib.buffalo.edu/discovery/fulldisplay?docid=alma9938983083804803&context=L&vid=01SUNY_BUF:everything&lang=en&search_scope=MyInst_and_CI&adaptor=Local%20Search%20Engine&tab=Everything&query=any,contains,Artificial%20intelligence,AND&query=any,contains,finance,AND&mode=advanced&offset=0
