AI is coming for Wall Street: Banks are reportedly weighing cutting analyst hiring by two-thirds

AI is coming for Wall Street: Banks are reportedly weighing cutting analyst hiring by two-thirds
Pls share this post


Listen to this article
wall street bankers
  • Big banks on Wall Street could pull back hiring plans as they lean more heavily on AI.
  • New junior analyst hires could end up being cut by as much as two-thirds, sources told the New York Times.
  • Banks have already been exploring AI software under nicknames, sources said.

Incoming junior Wall Street analysts could be in danger of losing their jobs to AI, sources within banks told the New York Times.

Big firms are reportedly mulling whether to pull back on hiring new analysts as Wall Street leans more heavily on AI, several people familiar with the matter at Goldman Sachs, Morgan Stanley, and other banks told the publication this week.

Incoming classes of junior investment-banking analysts could up being cut as much as two-thirds, some of the people suggested, while those brought on board could fetch lower salaries, on account of their work being assisted by artificial intelligence.

READ ALSO  Here's why economists are so worried about soaring US debt levels

“The easy idea is you just replace juniors with an AI tool,” Christoph Rabenseifner, the chief strategy officer for technology, data, and innovation at Deutsche Bank, told the Times, though he noted it would still be necessary to keep human staff.

Banks have already been testing AI software, employing them under monikers like “Socrates,” the report found.

A Goldman Sachs representative told Business Insider the bank was still in the “early stages” of exploring AI technology, adding that it was “pleased” with the results it had seen so far. But scaling back hiring is out of the picture at the moment:

“We have no current plans to alter our incoming analyst classes as a result of these efforts,” the spokesperson said. 

READ ALSO  The economy has most consumers feeling like they are stuck in place

Deutsche Bank told Business Insider it was too early to comment on any potential job cuts. Morgan Stanley did not immediately respond to a request for comment.

Some finance-industry executives have publicly hinted at a future shift in the workplace. JPMorgan boss Jamie Dimon said artificial intelligence had the potential to “reduce certain job categories or roles” in his annual letter to shareholders.

BlackRock chief Larry Fink told the Financial Times last year that AI had “huge potential” to raise worker productivity, later adding that the asset manager was spending a “huge amount of time” on artificial intelligence.

Further, Goldman Sachs has estimated that around 300 million workers could be significantly impacted by AI, while a McKinsey report found that 12 million workers could be completely displaced by AI by 2030.

READ ALSO  'Big Short' investor Steve Eisman details the 4 themes that have him betting on a turbocharged infrastructure boom instead of chasing AI hype

The consulting firm Accenture has an even more extreme outlook for industry disruption, forecasting that AI could end up replacing or supplementing nearly 75% of all working hours in the banking sector.

“AI will enable us to do tasks that take 10 hours in 10 seconds,” JPMorgan’s head of investment banking Jay Horine told the Times, speaking of Wall Street analysts. “My hope and belief is it will allow the job to be more interesting.”

Read the original article on Business Insider

Source



Pls share this post
Previous articleThe US is headed for a much more aggressive trade war with China regardless of who is president next year, economist says
Next articleOJ Simpson’s TV moment is never going to be replicated