You’re out of time. If you can’t already write a piece of code to find the longest palindrome in a string, you probably won’t be able to do so before the automation revolution deals a body blow to your banking job sometime around 2022.
Cathy Bessant, the chief technology and operations officer at Bank of America, said as much in conversation with Bloomberg last year. If you’re a bank employee who’s technologically illiterate, Bessant said it’s no good rushing to do a few coding courses on the side. You’re too late: things are moving too fast. “The kind of skills that we’ll need have to be taught beginning at a much earlier age,” said Bessant. “Whether you can train the same worker at the same time you’re changing their job remains to be seen.”
As banks automate everything from the IPO process to trading execution, to settlements, to research, the implication is that entire swathes of current employees will become superfluous. Bessant isn’t alone in sounding the alarm. Sergio Ermotti, CEO of UBS, says 30% of jobs at the Swiss bank could be automated out of existence within 10 years. Another UBS executive told Bloomberg that figure is more like 40%, and the time period is more like four to eight years than an entire decade.
The reality is that the displacement is happening already. Huy Nguyen Trieu, the former head of macro structuring at Citi, told us he knows of a team of just four algorithmic traders who now manage 70% of the trades that were done by 140 people in 2010.“Even being an outstanding trader in that team didn’t help anyone’s career,” Nguyen Trieu said. As we reported previously, the most forward thinking traders took time out to retrain in machine learning years ago.
However, as the tide goes out before the tsunami arrives, there is – maybe – something that can still be done. Not for nothing has Goldman Sachs president David Solomon been extolling the virtues of a well-rounded education that incorporates public speaking and communication. Just as banks need geeks, they’ll also need exceptionally charismatic individuals to act as the face of the new automated reality. Banking skills are bifurcating: if you can’t code, you’ll need charisma. If you have neither, bad luck.
The split is already happening. Speaking off the record, one senior equities saleswoman says banks are automating all the most “boring” parts of the sales process like booking client meetings and sending out research, but clients still want contact with, “trusted advisors”. A senior fixed income salesman tells us the most important clients have automated trade execution, but not the decision-making process preceding it, making salespeople as important as ever. A senior FICC salesperson says some banks are starting to wonder whether they tried to “equify” their fixed income sales and trading businesses too quickly: in illiquid markets, clients want human interaction. “Senior salespeople who were let go are wanted back.”
Of course, survivors who can’t code will need to combine charisma with a deep understanding of the systems they’re working with, especially under MiFID II. As Michael Dubno, former CTO at Goldman Sachs, said last month, future client relationships will pivot not upon research but upon data, and data will often sell itself. “Almost every business is going to be automated to the point where very few people are involved in the running of it,” said Dubno. Those few people will either design the automated systems or will sell the automated systems to clients. If you’re not going to be in the first cohort, you need to be in the second. Position yourself now before it’s too late.