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Apr 12, 20244 mins
Financial Services IndustryGenerative AIRobotic Process Automation
Financial services firms such as Goldman Sachs and Morgan Stanley are quietly testing AI tools that could leave CIOs delivering IT services to more bots and fewer employees.
Global banks and investment firms are currently mulling plans to replace entry-level financial analyst positions with artificial intelligence (AI), with as many as two-thirds of these positions potentially on the chopping block. This anticipated move could completely transform how these companies hire new employees and how they manage and deliver the technology employees use.
Major financial services organizations such as Goldman Sachs and Morgan Stanley are testing AI tools that could one day largely replace junior analysts and the hours of time they put into compiling and interpreting reports and crunching numbers and statistics — work that generative AI tools can do in a matter of seconds, according to a New York Times report.
Large banking firms are quietly testing AI tools under code names such as as Socrates that could one day make the need to hire thousands of college graduates at these firms obsolete, according to the report.
Indeed, Goldman Sachs has estimated that around 300 million workers could be significantly impacted by AI, and financial services companies appear to be moving in the direction to make this prediction a reality.
Financial services organizations already use many kinds of automation technologies, from venerable workload automation tools and basic job schedulers each used by around half of all organizations, to more modern ones such as intelligent document processing or intelligent process automation using AI, used by 27% and 33% respectively, according to SMA Technologies’ report, The State of Automation in Financial Services 2024.
One of the key reasons why AI may disrupt entry-level financial services positions is its potential to automate the information processing that comprises a large portion their job description. Moreover, many of these employees experience burnout due to the “long hours and grunt work” that these positions entail, making it a less attractive option for college graduates, despite the significant salaries offered, according to an earlier New York Times report.
Representatives from Goldman Sachs, JP Morgan Chase, and Morgan Stanley did not immediately respond to requests for comment on their companies’ plans to implement AI or its potential to change their hiring strategies.
Transforming the workplace
There is no doubt that generative AI already is transforming the workplace, but it remains to be seen just how much it will impact the jobs that humans do. Right now most organizations tend to be in the experimental phases of using the technology to supplement employee tasks, but that is likely to change, and quickly, experts say.
As the financial industry is poised to be among the first to adopt AI in a big way, CIOs and other employees in this industry also likely will be the first to see it impact their positions within a company.
Financial services, along with law and market research, are the top three industries that will be the first to see the effects of GenAI implementation, with Morgan Stanley, Bank of America and Northwestern Mutual as among the most “notable” companies affected, according to a report, Generative Artificial Intelligence and the Workforce, by the Society for Human Resource Management (SHRM) and Burning Glass Institute.
For CIOs in these fields, this may mean there are fewer employees with technology needs to organize and oversee; however, there will be new and different challenges in the forms of implementing and managing AI tools and their various roles in the organization.
For financial services in the short term, generative AI specifically will allow for further automation of financial analysis and reporting, enhancement of risk mitigation efforts, and optimization of financial operations, according to a report, The implications of generative AI in Finance, by consulting firm Deloitte.
But that’s just the tip of the iceberg for a future of AI organizational disruptions that remain to be seen, according to the firm. “With its ability to process vast amounts of data and quickly produce novel content, generative AI holds a promise for progressive disruptions we cannot yet anticipate,” the report stated.
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