People look at a bionic robot at an exhibition during the 2017 national mass innovation and entrepreneurship week in Beijing, capital of China, Sept. 15, 2017. (Xinhua/Zhang Chenlin)
Artificial intelligence (AI), along with other financial technology (fintech) innovations, are significantly changing the ways that financial business are being run, especially in the fields like trading, insurance and risk management, leading the traditional financial industry into a new era.
ROBOTS REPLACING HUMANS
Back in 2000, Goldman Sach's New York headquarters employed 600 traders, buying and selling stock on the orders of the investment bank's clients. Today there are just two equity traders left, as automated trading programs have taken over the rest of the work.
Meanwhile, BlackRock, the world's biggest money manager, also cut more than 40 jobs earlier this year, replacing some of its human portfolio managers with artificially intelligent, computerized stock-trading algorithms.
Those two big companies are not the only financial institutions replacing human jobs with robots.
By 2025, AI technologies will reduce employees in the capital markets by 230,000 people worldwide, according to a report by the financial services consultancy Opimas.
"Asset managers, analysts, traders, compliance administrators, back-office data collection and analysts are most likely to lose their jobs, because their jobs are easier to be replaced by automation and AI," Henry Huang, an associate professor at Yeshiva University's Sy Syms School of Business, told Xinhua.
"The net effect of this kind of automation will be more about increasing the productivity of the workforce than of robots simply replacing people," said Richard Lumb, group chief executive of Accenture's Financial Services operating group.
The best automated firms will outperform their competitors by making existing workforces more productive through AI, he added.
While humans are losing jobs in the financial industry, companies are enjoying the benefits bringing by AI technologies.
"Initially AI will add the most value and have the largest impacts in compliance (especially anti-money laundering and know-your-customer functions), cybersecurity and robo-advice," Lumb told Xinhua.
WALL STREET EMBRACES FINTECH
Facing rising pressures from fintech innovations, represented by AI, Wall Street financial institutions choose to embrace the new trend.
"In general, we see the outlook for fintech as strong. Demand for fintech by banks is growing because of regulatory and capital pressures, competition from large technology players like Google and Amazon and the abundance of new security threats," Lumb said.
The FinTech Innovation Lab, an annual program launched in 2010 by Accenture and the Partnership Fund for New York City to foster fintech growth, has helped New York participants raise more than 440 million U.S. dollars.