Future of finance with respect to generative AI/automation
Currently deciding on what career path to follow and have pretty much narrowed it down to medicine and finance.
I love finance, probably a bit more than medical science, but I am not totally sure how resilient this industry is to automation (I have a feeling white-collar jobs will suffer from wage compression/stagnation as corporations can decrease costs using generative AI)...
Any thoughts?
Based on the most helpful WSO content, the finance industry is indeed undergoing significant changes due to advancements in generative AI and automation. Here are some key points to consider when evaluating the future of finance in relation to AI:
Automation of Routine Tasks: Many traditional tasks in finance, such as data analysis, risk assessment, and even some elements of financial modeling, are increasingly being automated. This trend is expected to continue, which could reduce the number of entry-level positions and change the nature of the work involved.
Focus on Higher-Level Skills: As routine tasks are automated, professionals in the finance sector will need to focus more on higher-level skills such as strategic decision-making, client management, and complex problem-solving. These areas are less likely to be automated in the near future and can provide a competitive edge.
Technology Integration: Embracing technology and becoming proficient in digital tools and platforms will be crucial. Understanding how AI works and how it can be applied in finance will be an invaluable skill.
Job Security and Wage Impact: While automation might lead to job displacement in some areas, it also creates opportunities in others, especially for those who adapt and upskill. However, as you mentioned, there could be wage compression in roles that become more automated.
Emerging Roles: New job roles are likely to emerge as the finance industry evolves. Positions that focus on AI oversight, ethical considerations of AI use, and the integration of AI with human-driven processes are examples of areas that might see growth.
In conclusion, if you are more passionate about finance and are willing to continuously learn and adapt, there are still promising opportunities despite the challenges posed by automation. The key will be to focus on developing skills that complement AI technologies rather than compete with them.
Sources: Thoughts on AI and the future of the job market?, Will robots replace your consulting or financial career?, Future of Banking, Future of Banking, What job to take if you best want to ride the generative AI wave over the next couple of decades. Serious question.
I can't speak to whether or not you should go into medicine, but I can talk a bit about the threat of new technology to the finance industry. This comment centers more around investment banking, private capital and corp dev. Finance is vast, and different areas will be impacted by AI in different ways.
I'm a former banker and I now work for a company that is doing some pretty cutting edge stuff in AI and automation for banking and private equity... so I've had a good look at what's coming. With respect to the resilience of finance jobs, senior level roles are not going anywhere any time soon. There is no AI replacement for discretion in underwriting / risk assessment and building relationships (at least not within the span of the main earning years in your career). However, for years the industry has operated with a wide pyramid structure. There is often 3-5x the number of juniors as seniors on deal teams. This structure will evolve and the base of that pyramid will shrink to a degree. My company has these conversations pretty openly with senior bankers across the street. The common viewpoint is that this change is not going to happen with sudden layoffs, and AI will not replace the analyst completely. The adoption will be gradual, and the analyst/associate job will get more efficient. The result: they just won't need as many analysts in their incoming classes to do the same number of deals. The hope is that the role is more interesting, the hours may be slightly better, and the combination of those things also reduces attrition.
So is now a good time to go into these roles? I can't tell how old you are from your post but if you are starting your career in the next 1-3 years and you are targeting a tech-forward shop, I think it's the best it's ever been. But if you are still in high school, it may be a little more challenging to find an entry level seat in 5+ years. The AI adoption in regulated industries will be slow, but it will happen eventually.
Thank you. I am currently about to graduate high school - so right in the middle of those two intervals you describe. Very unfortunate timing
Above seems on the mark directionally speaking. If you're someone with 5+yrs exp today, you are likely in a good spot for a long time with these tools. Under 5yrs, it's a bit tricker
My guess is for kids who are freshmen in college today -- you are screwed, there's no two ways about it. Medicine is a much better option IMO
Thank you for the insight - I am currently a high school senior about to graduate so definitely something to consider. It sucks, though, knowing I can't pursue my passion because of something completely out of my control...
Lotus123 was about as game changing an innovation as one has seen. Since the advent of Lotus (and then excel), banking analyst classes have grown 15x
the analyst / associate role will evolve but every innovation thus far has increased deal activity and the need for people to manage that innovation. It would be a huge exception for generative AI to be different.
You don't think that AI is indeed a huge exception? I personally think this might be one of the most revolutionary inventions in human history, next to the printing press, Internet, penicillin, etc.
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