26 March 2017
Visit EBAday.com

Capital markets jobs on the line as banks raise AI spend

07 March 2017  |  5105 views  |  0 Robo advisor

Up to 230,000 employees in capital markets are set to be replaced by artificial intelligence agents over the next eight years, according to research by consultancy Opimas.

The consultancy estimates a 28% improvement in financial institutions’ cost-to-income ratio by 2025 as they automate routine processes currently performed by employees.

In terms of job losses, the asset management industry will shrink most, with around 90,000 people being replaced by machines. The firm estimates that a third of the jobs lost to machines will be replaced by technology and data providers serving the industry’s new needs, creating close to 30,000 new jobs at technology and data providers.

The uptick in spending on AI-related technologies - including robotic process automation, machine learning, and cognitive analytics - is already evident, with $1.5 billion expected to be allocated across the banking industry over the next year, rising 75% to $2.8 billion by 2021.

Bank investment in the technology is likely to reinforce current power structures, believes Opimas, creating a formidable barrier to entry for new startups.

"Since they need access to vast amounts of data to efficiently train an AI system, banks have a clear advantage over potential new entrants because they can leverage their huge internal data sets," says the report. "Once financial firms revamp their business operations using AI technologies, they will raise the barriers to entry in their market so high that it will be nearly impossible for newcomers to compete."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Millions of jobs at risk in Fourth Industrial Revolution - BofE staff blog

Millions of jobs at risk in Fourth Industrial Revolution - BofE staff blog

01 March 2017  |  6108 views  |  2 comments | 18 tweets | 16 linkedin
Robot workers to monitor markets for abusive trading

Robot workers to monitor markets for abusive trading

28 February 2017  |  5352 views  |  0 comments | 16 tweets | 16 linkedin
BNP Paribas takes stake in AI-based compliance startup

BNP Paribas takes stake in AI-based compliance startup

30 January 2017  |  8915 views  |  0 comments | 16 tweets | 16 linkedin
RBC hires AI pioneer as advisor to new machine learning lab

RBC hires AI pioneer as advisor to new machine learning lab

19 January 2017  |  6154 views  |  0 comments | 10 tweets | 9 linkedin
Accenture and Blue Prism sign bank to robotic process automation software

Accenture and Blue Prism sign bank to robotic process automation software

05 January 2017  |  9832 views  |  0 comments | 6 tweets | 14 linkedin
Japanese insurer to replace 30% of workers with AI

Japanese insurer to replace 30% of workers with AI

04 January 2017  |  5037 views  |  1 comments | 12 tweets | 9 linkedin
Nordea looking for AI and blockchain breakthroughs

Nordea looking for AI and blockchain breakthroughs

22 August 2016  |  10328 views  |  0 comments | 18 tweets | 21 linkedin
Deutsche Bank crowdstorms AI ideas

Deutsche Bank crowdstorms AI ideas

09 May 2016  |  12253 views  |  0 comments | 27 tweets | 17 linkedin
Tech revolution to wipe out 7.1 million jobs over next five years - WEF

Tech revolution to wipe out 7.1 million jobs over next five years - WEF

18 January 2016  |  6516 views  |  2 comments | 17 tweets | 15 linkedin

Related blogs

Create a blog about this story (membership required)
visit abe-eba.euVisit capgemini.com

Top topics

Most viewed Most shared
French retailer Carrefour launches online bank accountFrench retailer Carrefour launches online...
57201 views comments | 15 tweets | 35 linkedin
European Commission opens public consultation on fintechEuropean Commission opens public consultat...
9009 views comments | 42 tweets | 25 linkedin
Can banks really win in the payments business of the future? – new Finextra reportCan banks really win in the payments busin...
8699 views comments | 23 tweets | 37 linkedin
Westpac wants to take over your messaging keyboardWestpac wants to take over your messaging...
7153 views comments | 4 tweets | 10 linkedin
SecureKey taps IBM to put identity on the blockchainSecureKey taps IBM to put identity on the...
7115 views comments | 22 tweets | 15 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job