AI RIFing Financial Analysts (Juniors Only for Now). And Tomorrow?

April 19, 2024

This essay is the work of a dumb dinobaby. No smart software required.

I read “Bill Gates Worries AI Will Take His Job, Says, ‘Bill, Go Play Pickleball, I’ve Got Malaria Eradication’.” Mr. Gates is apparently about becoming farmer. He is busy buying land. He took time out from his billionaire work today to point out that AI will nuke lots of jobs. What type of jobs will be most at risk? Amazon seems to be focused on using robots and smart software to clear out expensive, unreliable humans.

But the interesting profession facing what might be called an interesting future are financial analysts. “AI Is Coming for Wall Street: Banks Are Reportedly Weighing Cutting Analyst Hiring by Two-Thirds” asserts:

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.

Okay, it is other people’s money, so no big deal if the smart software hallucinates as long as there is churn and percentage scrapes. But what happens when the “senior” analysts leave or get fired? Will smart software replace them, or it the idea that junior analyst who are “smart” will move up and add value “smart” software cannot?

Thanks, OpenAI. This is a good depiction of the “best of the best” at a major Wall Street financial institution after learning their future was elsewhere.

The article points out:

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.

Let’s look at the financial sector’s focus on analysts. What other industrial sectors use analysts? Here are several my team and I track:

Intelligence (business and military)
Law enforcement
Law
Medical subrogation
Consulting firms (niche, general, and technical)
Publishing.

If the great trimming at McKinsey and the big New York banks deliver profits, how quickly will AI-anchored software and systems diffuse across organizations?

The answer to the question is, “Fast.”

Stephen E Arnold, April 19, 2024

Written by Stephen E. Arnold · Filed Under AI, Financial, Management, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.