The rise of machine learning is set to reshape the workforce in the financial sector and could disrupt not only routine jobs, but also hit some of the highest paying onesThe warning was voiced by Dr. Marcos Lopez de Prado, professor at Cornell University’s School of Engineering, as he testified before the US House Committee on Financial Services on Friday, at a hearing to determine the impact of artificial intelligence (AI) on сapital markets.
The professor said that, while tech firms started distributing data and crowdsourcing the jobs of data analysts through special tournaments, any investment challenge could be solved by an army of data scientists without financial background. Thus “the highest paying jobs in finance” could be put at risk, he noted, adding that asset managers could crowdsource their entire research function, while insurance companies could do the same with their actuarial models.
“Financial ML [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,” Lopez de Prado told the сommittee.
While some of other witnesses also voiced concerns on how automated markets are reshaping the workforce, other invited specialists in investment and finance believe that AI could unlock many opportunities. One thing is clear, while the sphere is going to change, the question is if people are ready for it.
Rebecca Fender, Senior Director of the Future of Finance at the CFA Institute, an association of investment professionals, told the members of the task force that 43 percent of CFA members and candidates expect significant change in their roles in the next 5-10 years. The three roles “most likely to disappear” are sales agents, traders and performance analysts, she said, citing the result of a survey of more than 3,800 respondents.
Meanwhile, Kirsten Wegner, CEO of Modern Markets Initiative, said that policymakers are better to encourage the transformation to automatization, instead of impeding it, as it opens the door to many tech professionals.
“There are countless job opportunities popping up in coding, cybersecurity, data storage and management, quantitative reasoning and other technology verticals that Wall Street plans to prioritize,” she said, adding that employment opportunities could stem from blockchain, e-banking, robo-advising and new cryptocurrencies.