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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."
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AI Will Wipe Out Half the Banking Jobs In a Decade, Experts Say

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  • Who is Al, and why should I be afraid of him?
  • by Anonymous Coward

    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.

  • by jfdavis668 ( 1414919 ) on Friday April 20, 2018 @09:38PM (#56475579)
    Otherwise it will never figure out how to access the data.
    • Unfortunately AI will be fluent in C++ long before being able to accomodate with Cobol phrasing. These bankers thought of everything!
  • by Mr307 ( 49185 ) on Friday April 20, 2018 @09:41PM (#56475595)

    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.

    • Re: (Score:3, Insightful)

      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!

    • by fred911 ( 83970 )

      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.

    • by Anonymous Coward

      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.

    • by ShanghaiBill ( 739463 ) on Saturday April 21, 2018 @12:56AM (#56476269)

      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".

      • by q_e_t ( 5104099 )
        Not all ANNs cope with unstructured data. In fact most types don't, and it use various levels of preprocessing and selection. But then various 'AI' techniques achieve various things, such as clustering or classification, some of which can be achieved with statistical techniques. Back in the day when memory was at more of a premium you might use principal component analysis, a statistical technique, to do dimensionality reduction. We use Gestalt feature extraction, and graphs for image recognition at least f
        • '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.

          • by q_e_t ( 5104099 )
            It isn't pretending, as there is, or was, some biomimicry there, although some techniques have somewhat diverged. The issue is still often reasoning about the behaviour, i.e. rule extraction, and the assurance it can give you over and above validation and test sets. Just creating those effectively, along with training sets, is a difficult enough statistical problem, especially where you are also incorporating some expert gold standard.
    • I think you will find ATM machines and online banking have already replaced most of the useful people, mostly leaving the zombies and psychopaths.

      What is proposed here is dumping the zombies.

  • by greenwow ( 3635575 ) on Friday April 20, 2018 @09:49PM (#56475625)

    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.

    • by Anonymous Coward

      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

    • by Anonymous Coward

      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.

    • by Kjella ( 173770 ) on Friday April 20, 2018 @10:26PM (#56475801) Homepage

      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.

      • by jopsen ( 885607 )
        America is so far behind it's hard to comprehend... I just recently moved back to Denmark from San Francisco, and trying to cash a check from my former landlord is basically impossible. I remember cashing a Canadian check 5-6 years ago, but today banks won't touch checks.

        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
      • If bank tellers were, or will be, replaced - it's not because of AI, it's because of ATMs and internet banking. Dumb computing. As the comments have explained.

        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
    • by fred911 ( 83970 )

      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.

    • 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.

    • 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.

  • 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)

    by mentil ( 1748130 ) on Friday April 20, 2018 @09:53PM (#56475651)

    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.

    • 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.

    • by rsilvergun ( 571051 ) on Friday April 20, 2018 @11:07PM (#56475935)
      shifting nearly all tech work overseas in less than 10 years. I watched it happen overnight. I lived through it (and the constant layoffs). Banking executives are only "conservative" in the sense they don't like paying taxes. They're plenty progressive when it comes to saving money. Remember, we've structured their pay around stock price, and the best way to raise stock price is to have fewer employees. That's why everytime the economy tanks there's mass layoffs to bump the stock. This'll be the same thing, only this time the jobs aren't going overseas, they're just gone.

      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 /.er posting on a Friday night, so you can bet I don't have kids). So what do I care?
      • by mentil ( 1748130 )

        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

        • they're all over blockchain and their executives sit on the board of directors of major Wallstreet companies that live by High Frequency Trading (which, rather annoyingly, is a modern marvel of engineering). They've long since learned that tech good. They don't understand it (they're really just members of the ruling class like kings of old) but that doesn't mean they don't know it's valuable. Just like kings knew metal weapons & armor were valuable.
      • by antdude ( 79039 )

        Just like me. :/

    • by Anonymous Coward

      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)

    by Anonymous Coward

    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

  • by davecb ( 6526 ) <davec-b@rogers.com> on Friday April 20, 2018 @10:01PM (#56475683) Homepage Journal
    The introduction of Automatic Teller Machines led to an increase in human tellers, as well as business.
    • by Jahta ( 1141213 )

      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).

    • 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.

  • 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)

  • ... working on the fucking AI shit.

  • Their quality of life shall improve... even if laying on a beach broke somewhere.... They will be happier, even if they dont it yet.
  • AI has the potential to make the dishonest and sleazy practices that led to the Great Recession of 2008 look bush-league, bring about a worldwide economic crisis the likes of which has never been seen - and yet still make the banksters rich beyond the dreams of avarice.
  • "...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.

  • Rod Sterling saw this in a different form half a century ago.

  • Yeah... No... (Score:5, Interesting)

    by oic0 ( 1864384 ) on Friday April 20, 2018 @11:15PM (#56475965)
    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...
    • by mjwx ( 966435 )

      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

  • 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."

  • Experts say experts are shitty at predicting the future.

  • Will it not wipe out the bankers? One can only hope.
  • Deutsche Bank will be wiped away [bloomberg.com] by the next forthcoming derivative crisis, well before they can ever set up an AI system to replace financial workers.
  • 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

    • 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.

  • Will collecting more information simply create white noise that will drawn AI-bots pretty soon?

  • I know this might be seen as trolling but I see banking as the root of much of the world's problems. So, an out of work banker might not be such a bad thing after all. Banks do all sorts of slimy shit in the name of making money.
  • First the lawyers [slashdot.org] and now the bankers? Artificial intelligence is ruining our world.
  • "We are not good at multiplying 16-digit numbers, but we're good at judging people and detecting if someone is telling the truth."

    No, we really aren't. In fact, we're quite bad at this.

  • Remember the recent Wells Fargo crimes of fraud and gouging of clients w/ loans.
    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.
  • ...will be COBOL programmers.

Forty two.

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