Bankers Publicly Embracing Robots Are Privately Fearing Job Cuts (bloomberg.com)

An anonymous reader quotes a report from Bloomberg: Within the upper echelons of many financial firms, there's a lot of soul searching as executives prepare to roll out a new generation of technology. Publicly, they're upbeat, predicting machines will perform almost all repetitive tasks, freeing humans to focus on more valuable pursuits. Privately, many confide to peers, consultants and sometimes journalists that they're worried about what will happen to their staffs -- and what to tell them. There's also uncertainty. Maybe it's all overblown, executives say, because the tech will be hard to implement and humans will find new roles. Or perhaps it's the beginning of the end for legions of professionals in one of the world's most lucrative fields. Can jobs held by office-dwelling millionaires disappear like those on factory floors? The result, is that employees aren't getting a clear message on what's to come.

For a rosy scenario, look to McKinsey & Co. In July, the consulting firm published a report estimating machines are ready to assume roughly a third of the work now performed by banks' rank and file. The authors framed it as positive: People will have more time to tend to clients, conduct research or brainstorm ideas. So far, it noted, firms at the forefront aren't slashing jobs. At JPMorgan Chase & Co., one of the most tech-savvy banks, Chief Executive Officer Jamie Dimon predicted in June that his workforce will more likely grow than shrink over the next 20 years. Technology may displace workers, he's said, but it also creates opportunities. Yet in interviews, about a dozen Wall Street executives and consultants responsible for deploying technologies -- and steeped in their capabilities -- were more bearish on humans. Machines will take over task after task, they said, and banks simply won't need nearly as many people.

Comments

We all know this is comming

[rsilvergun]

and I'm guessing we're not going to do a damn thing about it because a good chunk of us can't bear the thought of somebody having a nice things in life and not working relentlessly to get it. It comes down to an antiquated concept of 'fairness'. They worked and sacrificed and suffered to get what little they've got in life so why shouldn't everybody else? Hell, I've seen it with some of my liberal LGBTQ friends even, who were upset that the younger generation of LGBTQ folks didn't go through as much shit as they did. It's a pretty common sentiment and one that the ruling elite have always been good at exploiting.

Maybe I'm wrong, but I'm thinking we're in for a second industrial revolution. And that includes the 80 years of rampant unemployment, poverty, social unrest and war they don't talk about in grade school.

Re: We all know this is comming

[Monster_user]

It all depends on who owns the land when the s*** hits the fan.

If enough land is held by the working class, they can survive. If there isn't enough land usable by the working class, that could be a real problem.

Re: We all know this is comming

[Anonymous Coward]

I see a few issues with your logic.

I agree that people should want to be productive members of society. However, people aren't paid according to the contribution they make to society, but rather how the market values the goods and services they produce. For example, a parent who raises a child well to be a productive member of society has made a valuable contribution to society in the process, yet we don't pay them for their contribution. Although the United States provides a tax deduction for dependents (not sure what other countries do), this does not measure the effort and skill to raise the child well.

Although it has changed in recent decades, stay-at-home mothers were once very common. Those women didn't get paid for goods and services unless they ran a business out of their house. However, they did contribute to society by raising their children well. I also believe our society was better off when parents, both mothers and fathers, spent more time around their children and less time working. Unfortunately, they don't get paid for that contribution to society.

There are plenty of other examples of the differences in how people are paid versus their contributions to society. Furthermore, there are plenty of jobs that are essential for society to function, but do not pay well. For example, the building I work in is cleaned by janitors at night who aren't paid particularly well for their services. The low pay is because the job doesn't require skilled labor and it isn't difficult to find a replacement. The market doesn't place great value on the services they provide, yet they are necessary for the workplace to function. If the scientists working in the building during the day had to take time away to clean the building, they would be less productive. The market doesn't account for that in valuing the work done by the janitors. That's why low income workers get tax credits, because they provide essential services and we need to ensure that they have enough to live on. We need to ensure that someone is providing those services.

I'm also not convinced that providing a universal basic income would make society less productive. I'd love to innovate and have the opportunity to start my own business. However, I depend on the monthly pay from my current job, and the risk is too great to leave that job and focus on my business. A universal basic income might remove that risk and give me the freedom to focus on innovating and starting my own business rather than being tied to my current job. I might be able to make a greater contribution to society if I could do that, but right now, it isn't a viable option. There are many other potential innovators and entrepreneurs who don't take that risk because it's too great. Sure, there are people who would mooch of of a universal basic income. However, it is entirely possible that there would be a net benefit to society because of the freedom to take risks as entrepreneurs and innovators knowing that they're basic needs would be met through a universal basic income and universal health care.

Does it matter if some people get to mooch off of the system if society, overall, is advanced? I suspect that a universal basic income and ensuring that everyone's basic needs are met would actually lead to a more productive society than we have now.

Re:We all know this is comming

[Kjella]

Well, people tend to take things they haven't worked for as granted and that goes both for technology and society. My dad was born before WW2, he remembers Norway as occupied by the Nazis. I can't appreciate our freedom the way he can, I've never lived it. And that means we sometimes lose perspective, like how a few deaths to terror is actually a lot better than the millions upon millions killed in the last great war. While I can read a history book I can't really grasp how it was to live before TV, but I do remember the time before cell phones and I understand the difference that makes far better. I'm not saying it's always so, but often those who have worked and sacrificed and suffered are under-appreciated by posterity, not by intent or malice but simply because we haven't truly felt the impact they made. For us it's "always" been so.

Re: We all know this is comming

[lessthan]

And instead, our productivity went up. We had more time to do more work. It is not a great trade.

Re: We all know this is comming

[Kiuas]

Does it matter if some people get to mooch off of the system if society, overall, is advanced? I suspect that a universal basic income and ensuring that everyone's basic needs are met would actually lead to a more productive society than we have now.

Entirely agreed. One of the reasons we're trialing basic income here in Finland (not for everyone at the moment, it's an experiment where a group of people on unemployment benefits have been transitioned to basic income) is that the current models of social security are outdated and no longer in tune with the way the job market functions. Back in the 60s-80s when the Finnish welfare system was created (much of it being copied from our neighbors to the west in Sweden who, having been spared the 2nd world war had had a head start in building theirs) there was still an idea going on that full-time employment is the end goal of all healthy people. This meant that the unemployment benefit was to be used as a mechanism in between full-time contracts or for people who've just graduated.

However, as we know throughout the west outsourcing and especially automation have already changed the landscape drastically. Companies hire less and less people on permanent contracts and instead favor a gig-based economy. This creates a lot of issues with the current old fashioned social security system because if someone's unemployed and they take up say a 2 week contract or a part time job, this immediately either entirely cancels or massively shrinks their unemployment benefit. This leads to a situation where people who're unemployed do not want to pick up such job-offerings because it affects the stability of their income. If your benefit is cancelled because you got work for a few weeks, you have to re-apply for it after that which takes time and may make a significant dent in your income. The same goes for micro-businesses and self-employment. Even if someone has a skillset that they could use to make some money on the side while looking for a job, many people choose not to do so because there's a real risk of the officials saying: 'aha, I see you've been tutoring students and being paid for it, that makes you an entrepreneur and we're now going to slash or revoke your benefit'. So it's pretty much an 'all or nothing' scenario right now where the system either expects you to be unemployed or working, there's no 'in between' mode and that's becoming more and more of an issue.

Unfortunately our current government is center-right and blind to the current realities so they're working their assess off to make the situation worse, not better (the basic income trial mentioned earlier was created prior to the current government). We have a couple hundred thousand more unemployed people than open job offerings at this point (the '08 crisis combined with the implosion of Nokia created a huge crater on the job market form which we've not fully recovered, people don't realize this but Nokia was responsible for almost a third of all of our exports), but the government, despite being aware of this, brazenly and openly lies and claims that the problem is that unemployed people arr all 'lazy' and just wanna mooch off the system. So using the 'lazy moochers' as a lame excuse they're creating all kinds of bureaucratic contraptions creating more and more pitfalls for the unemployed people to go through for them to maintain their benefit, such as increasing the amount of paperwork and documentation that has to be provided lest the benefit be cut, and even in some cases forcing people to take what amount to unpaid internships or face a slash in their income (this is actually an illegal thing to do, but they do not seem to care anymore, it also skews the job market even further by injecting free labor into the system which reduces the number of paid positions). This is especially idiotic because the right to social security is in the constitution here, so even if a person falls out of the unemployment benefit, the state is still obligated by law to make s

Re: We all know this is comming

[ichimunki]

Nobody is having children to game the tax system. Once they have the children, perhaps, they are happy to use them as tools to "game" the tax system. However, the tax system was set up to be gamed by people having children. One reason we need all these children is that Social Security is basically a Ponzi scheme. It requires a growing pool of people paying in to cover those being paid out, at least until an equilibrium is reached. Inflation can help offset the number of payers needed a bit, except that then people want cost-of-living adjustments to their payments so the value of their payments doesn't decrease as they age. Of course, there are probably other, better ways to increase the pool of potential payers-in than having children... like letting people immigrate and become citizens. This routinely avoids the need to subsidize those people's first two decades in life with schooling and the like. But this probably won't stop most people from having children, too. It's like it's some sort of basic human drive.

Re: We all know this is comming

[Kiuas]

Somebody has to work to produce all those things people on UBI are going to consume. Why should I have to work and pay for other people's good time?

You shouldn't, and you won't. Pretty much no-one will. Most production will be entirely automated (in the west) within the next half a century or so. That's precisely the point: we will have immense production capabilities that require next to no workforce, but without UBI or an equivalent system, there will be no-one to buy any of those things which will lead to major issues.

Leverage that GO playing AI

[Neo-Rio-101]

All one needs to do is leverage that GO playing AI to trade the financial forex and commodities markets.
Once it figures out how those markets routinely move - AND THEY WILL (because the "business model" that runs them simply doesn't change - evidenced by Wall Street millionaires), then all one has to do is keep a server running and exploit the market for millions at a time while it makes automated trades.

I'm not even talking about HFT trading. I'm talking about standard swing trading.
Of course the only possible downside to this is EVERYBODY having an AI that can do this, and then the system will likely come crashing down, or become as volatile as BitCoin - with the key difference that it will affect actual world economies.

Bye Bye Middle Class...

[pipingguy]

... unless you're a plumber, electrician. I.e., any job that requires your physical presence and is not easy to automate.

"conduct research or brainstorm ideas"

Too many people doing this just creates chaos.

"workforce will more likely grow than shrink over the next 20 years"

Most people doing unrewarding, low-paid, make-work jobs precariously (since it'll be easy to replace anyone). Hire people or face big taxes.

"creates opportunities"

For a select few aided by automated systems.

You mean this won't...

[Richard Mills]

You mean this won't just give humans more time to do the important Wall Street banker things, like snorting coke off of hookers?!

Likely that't not their fear

[Anonymous Coward]

Their fear isn't what is going to happen when they have to fire their rank and file.

The real fear is what happens when the american public opens their eyes to this farce when they no longer can get any jobs and start rioting against the bankers and system

I like the comment about more time to "conduct research or brainstorm ideas" Yeah, on your own time, at home, while you're collecting unemployment and job searching.

At least 10% workforce reduction for one finance c

[Hadlock]

I used to work for a major regional finance company in their IT department, after almost three years there I finally made it down to one of the processing floors. What a disaster, something like 200 people on this floor, all overweight "lifers" with at least 18" deep of nick-knacks on their desk, they did... something? One lady I helped, every 10th check did not have the company logo on it. Her job was to print checks for brokers. Somehow the 20 programmers up on the IT floor hadn't gotten around to automating her job yet. The other 199 people on this floor had similarly mind-numbing jobs that were likely 2-10 lines of scripting away from being automated away. I suspect as these people get hit by busses and/or die of clogged arteries, their jobs will be automated. But 200 jobs is roughly 10% of that company, an entire floor of a skyscraper, poof, gone. They'll likely be out-competed by a much smaller company that can do the same services for a quarter of the cost and 6x the uptime before the last of those lifers retires.

Once the elite levels are affected, they worry

[ErichTheRed]

I live near New York City. NYC, London and maybe Hong Kong are the investment banking capitals of the world, and there are billions floating around because of it. Banks don't worry when their rank and file employees don't have jobs anymore due to automation, but that changes a lot when we start talking about the elite ranks.

For those who don't know, an associate job at an investment bank is an extremely common congratulatory gift for graduating from Ivy League and other elite schools' MBA programs. It's a closed club because the jobs (for new grads with zero work experience) start at a crazy six-figure salary and have bonus potential going way beyond that. The banks work the associates to the bone doing what basically amounts to number crunching in Excel and preparing pitch books for potential investors. If you live through this without getting fired, you will never worry about money again in your life once you graduate to the management and director/partner ranks. These are guys in their late 20s who own several cars, a condo in Manhattan and a Hamptons beach mansion...the amount of money floating around investment banking is unimaginable to regular humans.

If the elite don't have a place to put their kids after they get out of MBA school that gives them the same standard of living they have, you can bet they'll be privately worried, but they also have to publicly cheer for the automation of work because it's great for their clients. I hope we figure out the right balance, because otherwise someone is going to suggest killing off anyone who doesn't get over 120 on an IQ test, and that's not going to end well.