Artificial Intelligence Is Superseding Well-Paying Wall Street Jobs Posted on : Dec 11 - 2019

We’ve been told that there is nothing to worry about artificial intelligence, robots and technology. New technologies will only replace mundane, repetitive jobs and free up workers to do more meaningful work, claims the media and top management consulting firms.

Last week, the House Financial Services Committee’s Task Force on Artificial Intelligence conducted a meeting with university academics and Wall Street financial services professionals to discuss the impact of AI on trading, robo-advisory, market surveillance and other activities within the financial services sector. To set the tone, the report by Wells Fargo predicting 200,000 banking jobs in the U.S. will be lost over the next decade—due to the introduction of new technologies—was cited by the chairman of the AI Task Force, Rep. Bill Foster (D-Ill).

According to Marcos Lopez de Prado, the former head of machine learning at AQR Capital Management, algorithms in electronic markets have already automated the jobs once dominated by thousands of traders.

Look around any trading floor today and you’ll only hear a slight hum and see the flickering lights of the Bloomberg terminals and computer screens. Only a short while ago, you would have heard the the vibrant, rambunctious atmosphere of sales and traders crying out to customers and counterparts. When you see footage on cable news about the stock market, they’ll usually show a busy, open-outcry market on the floor of the New York Stock Exchange. It's really a Potemkin village. The cameras shoot where there are some live traders and support staff herded into one small area. In reality, the New York Stock Exchange floor is devoid of humans and runs primarily on technology conducting the electronic trading activities.

Lopez de Prado, who is now a Cornell University professor, testified in Washington on the adverse impact of artificial intelligence on capital markets and jobs. He spoke of the algorithms automating the jobs of traders and displacing thousands of people. Lopez de Prado told the U.S. House Committee on Financial Services, “Financial machine learning creates a number of challenges for the 6.14 million people employed in the finance and insurance industry, many of whom will lose their jobs—not necessarily because they are replaced by machines, but because they are not trained to work alongside algorithms."

Investment banks, such as Goldman Sachs, now seek people who have the math, technology, software, coding, data analytics and related skills to work along with electronic trading. The need for real-life traders are done and over with. It used to be a fantastic and well-paying job to be a trader—not any longer! There was a time when street kids from the New York City boroughs of Queens and Brooklyn could get an in on the trading floor from a father, family friend or relative. No college degrees were required. It was a rough and tumble place. If they had a knack for trading, the stomach for taking risks and a strong desire to make money, they could—and did—earn large incomes. The doors to that opportunity have now closed due to the ascension of algo-driven trading. The working-class traders are no longer welcome, but the door remains wide open for Ivy-League Ph.D.s who write the codes. View More