AI’s Looming Impact on Finance Entry-Level Positions

Financial institutions are exploring the potential of artificial intelligence (AI) to perform core industry tasks, focused primarily on the benefits it brings to increasing operational efficiency, mitigating risk, and automating processes, according to various reports. However, as these institutions embrace AI technologies, early-career professionals face the risk of being sidelined before they can establish themselves in the field. 

The primary motivation for financial institutions to adopt AI technology is its ability to automate information processing, a major component of their operations. This approach can significantly decrease the time spent on compiling and interpreting reports and statistical data, leading to improved outcomes and enhanced risk mitigation, according to a Deloitte report.

"Financial services organizations use many types of automation technologies, from workload automation tools and basic job schedulers, to more modern ones, such as intelligent document processing or intelligent process automation using AI, used by 27% and 33% respectively by institutions," reads a SMA Technologies report.

In addition, financial firms report that many early-career professionals experience burnout due to the long working hours required for information processing tasks, according to a New York Times report. This situation around AI adoption, according to the New York Times, has prompted financial firms to reconsider their workforce strategies, which could impact up to two-thirds of these positions.

Currently, firms such as Goldman Sachs and Morgan Stanley are testing AI tools that could potentially replace entry-level financial analysts, according to CIO.

"Investment banks, long accustomed to the cultural shift implied by new technologies, are fast becoming Exhibit A for how new technology could not only complement but supplant entire ranks of workers," wrote Rob Copeland, Finance Reporter, The New York Times.

While executives acknowledge that AI might initially seem poised to replace young talent, Deutsche Bank highlights the ongoing necessity of human involvement. Representatives from Goldman Sachs, Morgan Stanley, and others told the New York Times that it was too early to comment on specific job changes. However, these same representatives estimated that as many as 300 million workers globally could be significantly affected by AI.

"Right now, most organizations tend to be in the experimental stages of using technology to supplement employee tasks, but that is likely to change quickly," read the CIO report. "As the financial industry is poised to be among the first to adopt AI on a large scale, it is expected managers will also be the first to see how it affects their positions within a company."