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The future is here: will robots Displace whether financial analysts with wall street
Material posted: Publication date: 11-05-2016
At the end of 2013, academics from Oxford has published researchstating that 47% of all working positions in the United States are "at high risk" of automation over the next 20 years. These findings provoked a flurry of publications in the press on the subject of how soulless robots taking jobs from people.

However, the researchers said, not only that may lose their jobs to unskilled workers performing simple actions, for example, factories or manufacturing. Now software, using new approaches like machine learning can do the job, which has always been considered the prerogative of highly educated and highly paid people who are not engaged in physical labor.

According to the study, the threat level of automation for specific industries varies greatly — to replace the doctor alive, communicating with the patient, a very long time will be impossible (and not the fact that this is even possible). But clerks in legal firms, which analyze the paper can readily be changed.

But most of all, according to the researchers, worry the workers in the sphere of Finance. Its high degree of automation and penetration of the technologies now threatens to 54% of employment positions.

Software that knows everything

In February of this year, the New York Times told the story of the developer analytical systems Kensho Daniel Nadler. His system collects and analyzes information that may affect the change in the situation on the stock market — and then generates recommendations about Commission transaction.

Before, when a major client of investment company called my broker and asked, for example, as the price it bought energy stocks may influence the worsening situation in oil-producing regions, for example Syria, he was able to answer based on personal impressions of the broker or he could call for help analyst. Such advice could be accurate, but there was always the risk of human error — an employee can not take into account some important factor.

To reduce the probability of error in each case it was necessary to conduct a deep study of similar events and how they influenced the market. However, the downside of this approach was the fact that by the time analysts to formulate investment advice, and the opportunity for its use could be for a long time lost.

Now companies like Goldman Sachs are starting to use analytical system like Kensho. They can be used to drive interest to the search query (for example "Syria"), and immediately see the results of the events connected with this topic. Similar to Google, which shows the content in the network based on the search query.

Kensho is increasingly used in Goldman Sachs and Creator of the program Nadler convinced that the dimensions of this and many other financial companies have to worry for their future. He predicts that within ten years a third to a half of employees of financial companies on wall street will lose his job because of Kensho and other similar systems.

The field of Finance have already gone through such transformation — at first lost their jobs clerks and brokers, who were engaged in the sale and purchase of shares by telephone. According to the source NY Times in the same Goldman Sachs these people there are only four, and there were about 600. In addition, many traders, who themselves have made transactions on the market, went with him, losing trade robots.

Now came the turn of financial analysts — a new software able to study and analyze significantly more data in much less time. And the reliability of these tests is also higher, said Nadler. He is also convinced that layoffs can not be avoided and employees of financial companies that work with investors — if they would be able to communicate with an intelligent analysis system that almost does not make mistakes, few people want to waste their time on people.

A few months ago, Anthony Jenkins, who has previously been dismissed from the post of the General Director of the largest British Bank Barclays spoke at the conference. His speech focused on "oversale" the financial industry, that is, the influence of new technologies.

"My prediction is that the number of divisions and working in financial companies employees in the coming years could be reduced by 50%," he said from the stage. And even in more optimistic scenarios, at least 20% of workers will lose their seats because of development of technologies".

The desire to save

One of the incentives for introducing innovative analytical tools can serve as the desire to save money. For several decades the disposal of foreign Finance, which spetsializiruyutsya many investment companies was more than profitable business. According to the consulting company BCG, the profitability of the industry, the asset management assets reached 39% in 2014 (for comparison, the profitability of sales of consumer goods at the same time did not exceed 8% and pharmaceuticals — 20%). The aggregate profit of the industry in 2014, according to various estimates, amounted to $102 billion. in addition, industry control other people's finances is growing rapidly: now the company "look out" for $ 78 trillion worldwide, and by 2020-th, this figure could grow to $ 100 trillion.

All this has led, in particular, to the fact that financial companies and asset managers sought higher fees from their customers. While markets are rising, customers may not notice the impact of commissions on total income, and revenues of asset managers are not threatened. But last year, the majority of markets significantly reduced the rate of growth or falling.

McKinsey reported that in 2015, decreased growth rates and profit margins of many American firms, providing services of asset management. Morningstar reports that in 2015, active managers faced with the "outflow" of more than $ 100 billion in managed capital. Another $400 billion were transferred under a "passive" management, which includes tracking stocks, indices and investing in them. However, this did not help those who invested in the securities of sovereign funds of countries that export natural resources. To compensate for the lost income after the collapse of the global price of raw materials is almost impossible. It is difficult to firms specializing in market shares: Aberdeen Asset Management, one of the largest investment funds in Europe lost 14% of managed funds, Ashmore Group — 19%.

The introduction of new technologies allows to reproduce the strategy of financial management at a much lower cost. At the moment the program is able to replace, for example, those managers who try to outperform the market by buying cheap stocks with high expected profitability. A computer program much faster analyzes the market shares that look cheap relative to their profits vypustili of the company, the value of its assets or paid its dividends. In addition, the system can use to trade not only stocks but also for example, the so-called structured products. Investors will no longer need to worry about managing or analysts of investment company can view something or not to act in accordance with the approved strategy.

In the case of the choice between asset markets, the Robo-Advisor, based on computer spreadsheets, will also be able to help investors manage their capital, and at a very low cost.


Investment in technological development in the field of Finance ("FINTECH") has tripled in the period from 2013 to 2014, reaching us $12.2 billion in New startups working on the optimization of each link of the entire financial system. With the help of special software banks decide whether to issue a potential borrower credit, insurance companies offer rates based on data about the driving style, collected by special means, and the so-called Robo-advisors help the investor to form portfolios of securities, each takon innovative breakthrough leaves without work a certain number of qualified staff.

And the fact that the user of the technology, like Kensho, was Goldman Sachs, speaks volumes, according to the Creator Kensho. If such a conservative and somewhat unwieldy company like Goldman ready to trust the software and otkazatsa from many employees, that employees are not so large financial companies may lose their seats even faster.


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