- Major Wall Street banks may abandon their hiring plans as they rely more on AI.
- New hires of junior analysts could end up being cut by as much as two-thirds, sources told The New York Times.
- Banks have already explored AI software under monikers, sources said.
New junior Wall Street analysts could risk losing their jobs to AI, banking sources told The New York Times.
Large firms are reportedly considering whether they should forgo hiring new analysts as Wall Street relies more on AI, several people familiar with the matter at Goldman Sachs, Morgan Stanley and other banks told the publication this week. .
New classes of junior investment banking analysts could be reduced by as much as two-thirds, some people have suggested, while those brought in could get lower salaries because their work is aided by artificial intelligence.
“The simplest idea is to just replace juniors with an AI tool,” Christoph Rabenseifner, director of strategy for technology, data and innovation at Deutsche Bank, told the Times, while emphasizing that it would still be necessary to retain human staff.
Banks have already tested AI software, employing it under names such as “Socrates,” according to the report.
A Goldman Sachs representative told Business Insider that the bank was still in the “early stages” of exploring AI technology, adding that it was “pleased” with the results it had achieved so far. now. But reducing hiring is not possible at the moment:
“We have no current plans to make any changes to our new analyst classes as a result of these efforts,” the spokesperson said.
Deutsche Bank told Business Insider it was too early to comment on possible job cuts. Morgan Stanley did not immediately respond to a request for comment.
Some financial industry executives have publicly hinted at future change in the world of work. 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 “tremendous potential” to increase worker productivity, later adding that the asset manager was spending “an enormous amount of time” on artificial intelligence.
Additionally, Goldman Sachs 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.
Consulting firm Accenture has an even more extreme outlook for industry disruption, predicting that AI could end up replacing or supplementing nearly 75% of all working hours in banking.
“AI will allow us to do tasks that take 10 hours in 10 seconds,” Jay Horine, head of investment banking at JPMorgan, told the Times, speaking of Wall Street analysts. “I hope and believe it will make the work more interesting.”
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