Previously posted on July 3, 2018, on The Data Incubator.
Front office jobs at investment banks are increasingly being taken over by intelligent machines. Many current front-office employees are worried about being displaced by artificial intelligence, and their fears are not unfounded. Huy Nguyen Trieu, former head of macro structuring at Citigroup, has a positive message for traders who risk being replaced by automation: become a data facilitator.
Huy Nguyen Trieu left Citi in 2016. After 13 years in financial engineering at SocGen and RBS, before becoming a Managing Director and head of macro structuring at Citi, he has shifted his focus to acting as a thought leader in the fintech space. Currently, a fintech fellow at London’s Imperial College and mentor at fintech accelerator, Level 39, Nguyen Trieu is both a fintech guru and entrepreneur. And his current focus is centered on the issue of long-term employability in investment banks.
“If you’re a flow trader, you will know that a lot of what happens on the trading floor has already been automated,” says Huy. “You will also see that a lot more can be automated in the future. If you want to keep your job, you need to question both what your role will be in this automated future, and what impact artificial intelligence will have on your area of the business.”
The threat is very real and very present. Banks are constantly working to cut costs by investing in technology and eliminating or drastically reducing their human workforce. In 2000, Goldman Sachs employed 600 sales traders working their cash equities trading desk; now there are only two traders, supported by 200 computer engineers. Nguyen Trieu recalls a team he worked with made up of 140 people in 2010; now there are four algorithmic traders managing 70 percent of the same book.
As automation continues to grow, the next wave of superannuation is likely to be as disruptive as the first – however, this time banks are looking to automate the roles of finance teams, compliance professionals, fixed income market makers, and anyone whose job can be mapped onto an algorithm. Every bank has a machine learning team tasked with the application of artificial intelligence to every possible process – from trading to client communications. Credit Suisse CEO, Tidjane Thiam, remarked at their most recent investor day that the bank plans to eliminate 45 percent of its 450 trading floor “control” roles with automation. These stories are echoed throughout the investment banking industry along with nearly every other type of industry in today’s world.
What can one do as a trader or a compliance professional who isn’t skilled in data science, machine learning, or artificial intelligence? Should you sit there meekly, waiting for notice that you’ve been replaced by an algorithm? Do you become the sort of charismatic communicator who can’t be replaced by code?
There is a third way, Nguyen Trieu says – employees at risk of being replaced by automation need to transform themselves into the sort of person who helps apply new automation technologies. You need to become a data facilitator.
“It’s very difficult now to find people who understand technology and finance,” he says. “This is the new space – if banks are to automate, they need an understanding of both the business processes being automated and how the new technology can be applied to them. There’s a huge shortage of people who can do this.”
At The Data Incubator, we see a lot of people who are taking our online courses that are budding data facilitators. The aim of our course, The Business of Data Science, isn’t to make managers and other business leaders into A.I. programmers. It’s to give them sufficient working knowledge of data science and A.I., to understand how it can be applied to their industry, and to get jobs working with automation technologies or advising on their evolution.