Will Wall-E steal Wall Street jobs?

Everyone remembers Wall-E.

He’s the lovable trash-compacting robot who gained sentience and whiled away his days cleaning up a deserted Earth’s colossal garbage problem – one junk cube at a time – in Pixar’s 2008 animation classic.

The idea of sentient robots may seem far-fetched, but Facebook recently had to shut down two of its AI machines, Bob and Alice, after they developed their own language and began communicating with one another.

Sci-fi storylines aside, robots and automation are having a growing impact on workplaces around the world. PwC predicted that up to 30 per cent of UK jobs could be at high risk of automation within the next 15 years.

Manufacturing, retail and administrative support faced the biggest challenges, but PwC believes 350,000 employees across financial services (FS) firms in the country could find themselves displaced by machines by the early 2030s.

Staff across the pond are also concerned about the rise of the robots. Last month, a LinkedIn survey revealed that one in three US bankers are worried machines will replace them.

So, is Wall-E about to steal Wall Street jobs? Or are FS employees fretting over nothing? First, let’s take a closer look at what we mean by ‘robots’.

How robots are transforming the workplace

Our mind often conjures up intelligent humanoid machines such as C-3PO from Star Wars or Arnold Schwarzenegger’s eponymous Terminator character when we think about robots. But in the real world, the term simply refers to any machine that can perform complex tasks autonomously or semi-autonomously.

In finance, robo-advisers exist to give clients investment recommendations without human intervention. You may also be familiar with chatbots that simulate customer service interactions.

A new class of software, robotic process automation (RPA), is also becoming more popular. Otherwise known as ‘digital labour’, RPA leverages machine learning and artificial intelligence (AI) to carry out the high-volume, repetitive tasks that humans currently perform.

As AI and technologies such as blockchain evolve, the use of robots in the workplace will rise, with machines able to tackle increasingly complex and laborious tasks.

MIT Media Lab recently published a whitepaper that suggested blockchain could be used to control armies of machines, dubbed ‘robot swarms’, for industrial processes, such as precision farming. This all sounds very Blade Runner, but how will bankers and the wider finance industry be affected?

What robots are having the biggest impact on FS?

The LinkedIn survey shows that finance professionals believe machine learning and AI are the industry’s biggest disrupters. However, different segments of finance disagree on the importance of these technologies.

FinTech businesses, perhaps unsurprisingly, expect big things from machine learning. Nearly two-thirds thought it was the most crucial area of development for robots. The majority of investment bankers (55 per cent) also thought AI and machine learning, along with blockchain (35 per cent), were the keys to unlocking value in the future.

Meanwhile, just 25 per cent of retail bankers thought the same. Instead, they thought digital lenders (54 per cent) and RegTech (40 per cent) were the technologies to keep an eye on. Financial advisers and wealth managers overwhelmingly (68 per cent) believe robo-advisers will transform their industry.

Despite the positive impact that many of these technologies will have on efficiency, cost-cutting initiatives and productivity, job security remains front of mind for many professionals. One-quarter said they feared automation could put their job at risk.

One BlackRock employee, rather succinctly, said: “Automation will continue to reduce the number of jobs in finance.”

Will robots replace FS workers?

So, should finance professionals prepare for the inevitable day when they receive their pink slips, only to be replaced by a droid that doesn’t need to eat, drink or sleep? Hardly.

Admittedly, recent research has been worrying. The World Economic Forum claimed that robotic automation would result in 5 million job losses across 15 developed countries by 2020.

But PwC predicts that the biggest risks will be for jobs where low or no qualifications are required. People with undergraduate degrees and above face a much lower chance of finding themselves out of work – so many financial professionals can breathe a sigh of relief.

In fact, the World Economic Forum claimed that robots could significantly reduce the manual workloads of some roles, freeing up workers to perform more value-added tasks, thus broadening their skillsets.

Moreover, FS and investment were highlighted as the industries where skillset stability was lowest. In other words, finance professionals can expect a substantial amount of up-skilling and re-skilling into different areas over the coming years, as technology takes over the more laborious elements of their roles.

Preparing for change

Both organisations and employees need to prepare for a future where autonomous machines are a prominent part of the workforce.

The rise of the robots will take time. For instance, only 4 per cent of organisations polled by PwC in 2016 had widespread RPA implementations, although 57 per cent said they’d produced at least one proof-of-concept.

But changes are already occurring in FS, and technology will continue to disrupt the workplace at a rapid pace. Those that confront this era of automation head on are more likely to adapt and leverage new technologies to their advantage.

Modern-day Luddites, however, could find their services and skillsets losing relevance in a brave new world.

Our 2017 Compensation and Market Trends Report combines our review of the prevailing conditions in the corporate governance recruitment market together with the results of our latest employer survey.