Big banks on Wall Street are considering pulling back on hiring plans as they increasingly turn to artificial intelligence (AI) to assist in their operations. According to sources within banks speaking to the New York Times, new junior analyst hires could potentially be cut by as much as two-thirds, as firms explore the use of AI software under nicknames like "Socrates."
Christoph Rabenseifner, the chief strategy officer for technology, data, and innovation at Deutsche Bank, acknowledged the potential for replacing junior analysts with AI tools, but emphasized the continued need for human staff in the workplace. While some within the industry have hinted at the possibility of job cuts due to AI implementation, banks like Goldman Sachs have stated that they are still in the early stages of exploring AI technology and have no current plans to alter their incoming analyst classes.
JPMorgan CEO Jamie Dimon and BlackRock chief Larry Fink have both highlighted the potential impact of AI on the workforce, with Dimon noting the potential for reduced job categories or roles. Additionally, reports from Goldman Sachs, McKinsey, and Accenture have suggested that AI could significantly impact the workforce, with McKinsey estimating that 12 million workers could be completely displaced by AI by 2030.
Overall, the use of AI in the banking sector is a topic of interest and discussion, with some firms considering the implications for their hiring practices and workforce structure. While the potential for job cuts looms, the industry is also exploring ways in which AI can enhance productivity and potentially make jobs more interesting for employees. As the use of AI continues to evolve, it will be important for banks and financial institutions to navigate the balance between technological advancement and workforce sustainability.