According to a new report machines could soon take over up to thirty percent of bank jobs. So who should be worried.
Artificial intelligence and other forms of automation could take over almost a third of investment banking jobs within just a few years, according to a report from consultant McKinsey.
The report, Cognitive Technologies in Capital Markets, takes a look at which jobs and processes within the investment and corporate banking world are most suited to automated technologies.
Humans Moving Up
The worrying conclusion is that 60 percent of jobs will face a game changing impact from artificial intelligence and robotics while up to 30 percent of jobs could be performed entirely via automation.
While this may be distressing news for investment bankers worried that they will become surplus to requirements, the report states that this shift in work practices will not just lead to job cuts but should also free up staff to perform more high-value tasks.
Already in Place
McKinsey’s report claims among processes most ripe for automation trade allocation is its number one, stating that the auto-population of trade details is already being piloted by a number of investment banks.
The report separates middle office, finance and operations tasks in its examination of what is most appropriate for automation and states that the latter group will enjoy greater employee capacity from the use of cognitive technology, especially a number of post-trade processes such as settlement/payments, confirmations and reconciliations.
The report also states that the technology will be ready to move to «centre stage» within two or three years but it also warns that it will not magically produce a flurry of double digit growth for banks.
It will though make banks more efficient and better able to respond to technology changes and recommends that they establish internal departments or centres to track emerging technology and encourage greater innovation.
Rainmakers Will Still Reign
In terms of the technology, McKinsey states that machine learning will have the greatest impact, while consumer-facing robots or cognitive agents will have the lowest overall impact.
However there is little focus on the front office and the role of traders and dealmakers.
Jobs Safe at Least For Now
The majority of investment banks have already set up a number of so-called innovation centres and started to pilot the use of cognitive technologies for some processes.
A number of bank heads have also sought to assure staff that the introduction of machine learning, robots and the like will not necessarily result in headcount reduction, at least for now.