The Blubber

Incoming junior Wall Street analysts could be in danger of losing their jobs to AI, sources within banks told the New York Times.

Consider the realm of entry-level Wall Street banking positions. Recent concerns highlighted in a New York Times report suggest that junior analysts could face potential job losses to AI. Sources familiar with the matter indicate that major firms are contemplating reducing hiring by as much as two-thirds as they increasingly rely on AI. This trend appears to be affecting even the most prestigious firms, including Goldman Sachs and Morgan Stanley, though these companies have not commented on the matter when contacted by Fortune.

The junior analyst role at large banks is highly sought after, primarily for its lucrative compensation and promising career trajectory. These individuals typically analyze financial trends, valuations, and economic data to assess risk in new investments. However, much of their day-to-day work involves mundane and repetitive tasks such as updating charts in presentations and comparing company valuations.

According to Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors and former vice president at Deutsche Bank, AI technologies have already been introduced in the industry to address financial, risk, and legal queries. While AI may not completely replace entry-level Wall Street jobs, it is expected to redefine these roles. Schulman believes that AI will reduce the number of employees required for certain tasks, shifting the focus of entry-level roles from data gathering to data verification and deeper analysis.

Christoph Rabenseifner, Deutsche Bank’s chief strategy officer for technology, data, and innovation, acknowledged the potential for AI to replace juniors in certain tasks but stressed the continued need for human involvement in decision-making processes.

As AI reshapes entry-level roles, future Wall Street professionals are likely to possess backgrounds in computer science, statistics, and data science, while still requiring creativity, business acumen, and economic understanding. Adaptation to these changes will be crucial for individuals aiming to excel in their roles and advance in their careers.

While AI can streamline routine tasks, it currently lacks the nuanced judgment of human workers. Tim Bates, a professor at the University of Michigan, notes that AI is reshaping roles rather than replacing them, emphasizing skills that AI cannot easily replicate.

For aspiring Wall Street professionals, Bates suggests studying AI capabilities, including data interpretation and strategic decision-making, and considering roles in sectors where AI integration is creating new opportunities. Despite AI's potential, others, like career coach Michelle Enjoli, believe its implementation in finance may be more limited initially, serving as a resource to assist employees rather than replacing them outright.