AI Will Wipe Out Half the Banking Jobs In a Decade, Experts Say 111
Experts in the industry say that current advances in artificial intelligence and automation could replace as many as half the nation's financial services workers over the next decade, though it will take a big investment to make that happen. The Mercury News reports: "Unless banks deal with the performance issues that AI will cause for ultra-large databases, they will not be able to take the money gained by eliminating positions and spend it on the new services and products they will need in order to stay competitive," James D'Arezzo, CEO of Glendale-based Condusiv Technologies, said. Intensive hardware upgrades are often cited as an answer to the problem, but D'Arezzo said that's prohibitively expensive.
Speaking to an audience last year in Frankfurt, Germany, Deutsche Bank CEO John Cryan predicted a "bonfire" of industry jobs as automation moves forward. "In our bank we have people doing work like robots," he said. "Tomorrow we will have robots behaving like people. It doesn't matter if we as a bank will participate in these changes or not, it is going to happen." Increased processing power, cloud storage and other developments are making many tasks possible that once were considered too complex for automation, according to Cryan. D'Arezzo, whose company works to improve existing software performance, said the financial industry is being swamped by "a tsunami of data," including new compliance requirements for customer privacy and constantly changing bank regulations. Bhagwan Chowdhry, a professor of finance and economics at the UCLA Anderson School of Management, offers a less bleak view of the future. "Technology will eliminate some jobs that are repetitive and require less human judgment," he said, "But I think they will get replaced by other jobs that humans are better at. Anything that requires judgment is something humans will continue to do. We are not good at multiplying 16-digit numbers, but we're good at judging people and detecting if someone is telling the truth."
Speaking to an audience last year in Frankfurt, Germany, Deutsche Bank CEO John Cryan predicted a "bonfire" of industry jobs as automation moves forward. "In our bank we have people doing work like robots," he said. "Tomorrow we will have robots behaving like people. It doesn't matter if we as a bank will participate in these changes or not, it is going to happen." Increased processing power, cloud storage and other developments are making many tasks possible that once were considered too complex for automation, according to Cryan. D'Arezzo, whose company works to improve existing software performance, said the financial industry is being swamped by "a tsunami of data," including new compliance requirements for customer privacy and constantly changing bank regulations. Bhagwan Chowdhry, a professor of finance and economics at the UCLA Anderson School of Management, offers a less bleak view of the future. "Technology will eliminate some jobs that are repetitive and require less human judgment," he said, "But I think they will get replaced by other jobs that humans are better at. Anything that requires judgment is something humans will continue to do. We are not good at multiplying 16-digit numbers, but we're good at judging people and detecting if someone is telling the truth."
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Is anybody surprised a CEO doesn't understand the jobs of his workers?
On the other hand, they might be that big fat and stupid? Big old corp, Peter principle, insufficient compitition and all.
People doing work like robots? In banking? Where? Did he forget all the money he saved in the 90s? Let me guess, German...old fashioned, still use typewriters and paper forms? Have a drummer keeping time for the mechanical adding machines. Doubt it, but don't know.
Re: But of course (Score:2)
German...old fashioned, still use typewriters and paper forms?
Like this guy [reuters.com]?
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Academics don't seem to know much either. From TFS: "we're good at judging people and detecting if someone is telling the truth"
Actually, this is something that humans are notoriously bad at. Deep neural networks already exceed human ability to recognize liars, by detecting microexpressions correlated with lying.
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But an AI may not be able to embrace a new realm of new business opportunities.
Humans have the ability to take risks and even though not all risks are worth taking you have to also realize that some risks can lead to great profit and progress. If nobody was willing to take risks then we wouldn't have gone to the Moon, crossed the Atlantic or even left Africa.
Re: But of course (Score:1)
Al? (Score:2)
Re: Al? (Score:2)
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no we are not (Score:1)
There was a study about how well people know if their own kids or unknown kids are telling the truth. Result was about 50% which is about as good as random.
People are not good at anything. Some individuals perhaps are but even that is rare.
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People are not good at anything.
What's important is that we all believe we are better than average.
Only if it learns COBOL (Score:5, Funny)
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Soon AI Blockchain Clouds will rule the world. (Score:4, Insightful)
Yes computers will make more trades and replace some workers in the financial arena, but its not AI, its still good expert systems.
We used to have editors that knew some tech stuff and wouldn't just spam clickbait all the time.
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We used to have editors that knew some tech stuff and wouldn't just spam clickbait all the time.
Maybe they were already replaced by some AI machinery years ago, editors have been sitting on a beach somewhere sipping Margarita's, and even us haven't been smart enough to figure it out. Good job there /., your AI gear passed the Turing test!
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A trusted, decentralized, secure and liquid blockchain is something bankers (and the Fed) need to be scared of. I believe we now are seeing demonstrative examples of such systems. I also believe it's in the best interest of the banking community to either participate in, or assure these create huge losses for current participants, securing their job stability. The last thing bankers want to deal with is having to pony up (and not earn from) their float.
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AI is the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages. AI exists. As far as I know, there are no self-aware computers though. I'm wondering if half the people commenting on /. are confusing AI with self-awareness or similar.
Re:Soon AI Blockchain Clouds will rule the world. (Score:5, Interesting)
its not AI, its still good expert systems.
No. This is completely wrong. "Expert systems" consist of structured and nested "if this do that" tables hand crafted by programmers querying human subject matter experts. Artificial neural networks can accept unstructured data, and find the patterns and correlations on their own. They are completely opposite approaches.
The revolution in trading is happening because of ANNs, not "expert systems".
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'AI' techniques achieve various things, such as clustering or classification
Which is exactly what ANN's and "Deep Learning" do, and nothing more.
If the developers like to pretend that there is something
biological about their programs, fine. Whatever floats your boat.
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What is proposed here is dumping the zombies.
But how many jobs will this AI create? (Score:3)
I've been a customer of NCNB which later became Bank of America for over forty-five years, and they just keep creating policies that require more employees. For example, I used their bill pay to transfer money to another BoA account for over a decade but since then they've discontinued that I have to go to a branch and get a teller every month to pay my rent. Also, I used to transfer money to several friends that have BoA accounts, but they since discontinued that feature since they require a credit card to sign-up for "SafePass" and they canceled my credit card due to the fact I didn't use it enough. So now rather than just being able to transfer the money online, I have to go to one of their branches and deal with a bank teller. I really miss being able to use my iPhone to transfer money, for example, to pay back a friend when they pay for a meal with their credit card. BoA just keeps creating more work for their tellers.
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Bank of America owns or leases over 4,600 locations the last I heard including a building I own 15% of. I think they're just trying to justify that huge cost by reducing the number of features you can do with their web page or with their iPhone app. I know I can no longer do bill pay to several vendors that I used to pay online that also had BoA accounts. I have to now go to a location and do a transfer. It just sucks when I didn't have to go to them for five+ years, but now I have to go to my local bra
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With BoA reducing features online with desktop web pages and with their mobile app, it seems like they're doing the opposite of trying to reduce the number of employees. Maybe other banks are using AI to reduce their number of employees, but Bank of America is increasing the demand for their local employees by removing features from their web site and mobile app.
Re:But how many jobs will this AI create? (Score:5, Informative)
So now rather than just being able to transfer the money online, I have to go to one of their branches and deal with a bank teller. I really miss being able to use my iPhone to transfer money, for example, to pay back a friend when they pay for a meal with their credit card. BoA just keeps creating more work for their tellers.
And they let you do that without fees? That's how they killed real world banking here in Norway, if you want to pay a bill in cash expect to be charged >$10 in fees for each. About $8 if you've got an account. By mail $0.25. Online, nothing. So 91% of all age 16-79 pay their bills online. Another overview I found suggests 97% by volume. Bank offices are closing left and right or they're going "cashless" with ATMs/deposit/exchange machines and just financial advisers, the people don't touch the money. Traditional tellers are almost extinct here.
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In the US, however, most online bill-pay systems are just web frontends for sending a physical check by mail. I remember the teller explaining this to me, and laughed because I thought he was joking. It's a pretty stark difference, in Den
Re: But how many jobs will this AI create? (Score:2)
The kind of employees under threat now provide "financial services" that only people with large accounts have to worry about. When automation starts hitting *this* class hard, is when we can expect serious attempts by government and also our corporate dictators to address the problem. So, within the next decade they say? Probably more like three or f
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If you trust your money with BOA, you are a fool. They're full blown criminals who enjoy toying with their clients money and trust. When they're caught they figure the fine was cheap enough... rinse, dry and repeat.
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I have to go to a branch and get a teller every month to pay my rent.
What is a branch? Or a teller?
My bank actively discourages ever visiting them. 5EUR every time you want to talk to a teller. And really there is zero reason to ever talk to a teller in this age.
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I really miss being able to use my iPhone to transfer money, for example, to pay back a friend when they pay for a meal
What bastards, forcing you to use BofA even though they suck.
If only you had more choice, like you would in a "free market".
Of course, that's just a fantasy.
All that is left is to teach AI (Score:2)
how to embezzle, make predatory mortgage loans, and to utilize the stock market to make high frequency trades to conceal their loses,
Maybe evicting some single mothers and shutting down some orphanages would also be in order. /s?
Judgment (Score:5, Insightful)
we're good at judging people and detecting if someone is telling the truth.
Hahaha, no. Experienced detectives trying to tell if someone is lying in response to a yes/no question, using their gut instincts, do no better than a coin flip. Also, remember this story [slashdot.org] posted just a few days ago: multiple forged signatures, and no investigation done before $Millions were already forked over to the scammers. Think about all the stories of scammers who use social engineering to convince corporate officers to wire them $Millions. OTOH, AI (ok, algorithms) has been used in automated fraud detection systems for decades.
Besides, technology being ABLE to replace half of workers is very different from those workers actually being replaced. Many banks are led by conservatives, and won't rush out to replace half their workforce; they'll slooowwwwllllyyy roll it out in test markets for a decade first, maybe waiting for several competitors to announce plans to do so first. Remember how long it took to roll out EMV in the USA? We didn't even get 'chip & PIN', just 'chip & signature'... oh and they got rid of the signature requirement so it's just 'chip' now.
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The EMV thing was because of liability. CC issuers make money on fraud, so they have an incentive not to do anything to prevent it.
Those same "conservatives" had no trouble (Score:4, Insightful)
We're about to head into another industrial revolution. The last few had decades of unemployment, wars and social strife before tech (and the New Deal) caught up and people were employed again. If you're going to do something to avert the next upheaval now's the time to start voting people into office that'll address the problem with something other than more "conservative" tax cuts for bank executives.
Or don't. I'm getting up there in the years and won't make it past 55 with my health problems (and I'm a
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Many of these conservative banks don't consider tech to be a core aspect of their business, any more than office supplies are. Thus it makes sense to outsource the tech stuff as much as possible. What banking is traditionally 'about' is relationships: talking to a client in a room, and selling them a financial service that will probably be eventually profitable for the bank. If there's an existing relationship it might be done over the phone, maybe with some paperwork faxed; but it's still pretty clear ther
Bull shit (Score:2)
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Just like me. :/
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we're good at judging people and detecting if someone is telling the truth.
Hahaha, no. Experienced detectives trying to tell if someone is lying in response to a yes/no question, using their gut instincts, do no better than a coin flip.
I think you are confused. The trick is asking different questions, looking for contradicting answers, and deciding where to focus follow up questions.
Source: Anyone who's ever been grilled by their SO when getting home too late. There's a bit more strategy to catching a lie than a coin flip, or I have a bridge to sell you.
haha! (Score:2, Insightful)
For someone who works in a LARGE bank. Let me just say this
BWAAAAAAAaaaaaaaaaaaaaaaaaaaaaaHAHAHAHAHA.
The one I work at is using software that EOL'd 5 years ago. This is a mainline program. They are just starting to replace it. There are thousands of programs like that. The supposition here is new unveted software is going to replace everyone. The banking industry lives and breaths microsoft excel. All of their internal software imitates that program in some way.
HAHA my catcpa is tableau
As did ATMs -- not! (Score:3)
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The introduction of Automatic Teller Machines led to an increase in human tellers, as well as business.
I don't know where you do your banking, but where I live ATMs have dramatically reduced the number of human tellers. Personal customers are pushed to use ATMs for both withdrawals and lodgments; even inside bank branches. To see a human teller you have to either be a business (with a significant cash turnover) or a high net-worth personal customer (that the bank wants to keep sweet).
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The introduction of Automatic Teller Machines led to an increase in human tellers, as well as business.
No, it didn't. The banks chose to open more branch offices at that time, because they wanted more physical presence. That increase in human tellers would have come whether or not they added ATMs into the mix.
"requires judgement" - fat chance (Score:1)
Bhagwan Chowdhry, [snip] Anything that requires judgment is something humans will continue to do.
He is so wrong. The people owning the AIs won't care about careful or correct judgement - it won't affect them; c.f. the RoboDebt scandal in Australia (an automated mailing of demand notices to welfare recipients where the algorithm was wrong and the notices weren't vetted before dispatch)
The other half will be ... (Score:2)
... working on the fucking AI shit.
You think they like their job (Score:1)
I'm worried (Score:2)
Bull... (Score:2)
"...we're good at judging people and detecting if someone is telling the truth."
No we're not. How do you think so many scammers, con-artists, and ponzy-schemes do so well? It's precisely because we're so bad at judging people and detecting if someone is telling the truth.
"The Brain Center at Whipple's" (Score:1)
Rod Sterling saw this in a different form half a century ago.
Yeah... No... (Score:5, Interesting)
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I work in a credit union. 90% of our jobs are customer facing for people who want to talk with a human instead of using the website or an ATM. There is very little back office. You have loan underwriters, title clerk's, IT, mail, and accounting. All small departments. Big stuff are call centers, tellers, FSRs, etc...
You're thinking of "banking" as just the front end stuff. Those jobs aren't under threat from AI.
Perhaps if we used the technical term "Financial Services" that you'll realise the customer facing part is actually a very small number of jobs, call centres included. The majority of jobs are underwriters, assessors, clerks, so on and so forth and its these jobs that will be replaced by AI because these jobs are what AI is good at, taking large sets of data and applying rules to them which is basically what
Circular reasoning? (Score:2)
Unless banks deal with the performance issues that AI will cause for ultra-large databases, they will not be able to take the money gained by eliminating positions and spend it on the new services and products they will need in order to stay competitive. . . . Intensive hardware upgrades are often cited as an answer to the problem, but D'Arezzo said that's prohibitively expensive
So banks will switch to AI for all the savings, but there won't be any savings? Then why switch to AI? And if there are savings from switching to AI, then what's the problem? What is this actually saying?
Maybe I can setup an AI that can post AI articles: "Most jobs in the ----- sector will be eliminated in the next 10 years according to AI experts. Companies in the ----- sector must be ready to innovate or they will get left behind. Workers will also need to retrain or be left in the lurch."
Kiss my bott (Score:1)
Experts say experts are shitty at predicting the future.
Nothing But Trouble: Bankers (Score:2)
https://www.youtube.com/watch?... [youtube.com]
And the bankers? (Score:2)
Don't worry! (Score:2)
It's happening already. (Score:2)
I've met bankers with a salary less than a dump truck driver. Once the bots have all the corners of beancounting squared away there is no need to keep an expensive suit around. Same with lawyers. I know of quite a few that barely get by.
I see the same in our space. The classic Type A software developer is on the way out. It's developer+key-account-manager+devops/admin these days. That's what I'm doing right now. Part time. With a salary that's still enough to live and more responsibility than ever. And stil
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I've met bankers with a salary less than a dump truck driver.
Actually, unionized dump truck drivers do pretty well for salary and have excellent benefits.
white noise? (Score:1)
Will collecting more information simply create white noise that will drawn AI-bots pretty soon?
Good! (Score:2)
Oh No (Score:1)
Well, this is completely wrong. (Score:1)
No, we really aren't. In fact, we're quite bad at this.
BIG RED FLAG!!! (Score:1)
Now, imagine WF getting away with it in the future via blaming an error in the AI system.
We, the people still loose. WF gets away with it.
It seems a major no-brainer to have severe regulations on ANY AI being developed.
The remaining jobs... (Score:1)