One in five finance jobs across the global capital markets – around 400,000 in total – will have disappeared by 2030 as more menial tasks are taken over by artificial intelligence (AI) and automation, according to estimates by the US research and consultancy firm Opimas.

The total workforce at capital markets institutions will decline from the  current figure of 2.1 million to 1.7 million over the period, Opimas predicts in its Workforce of the Future report. The asset management industry is expected to be particularly impacted by the combination of new technologies, declining fees and slowing asset inflows, losing around one third of its workforce.

The outlook for the coming decade contrasts with the past 10 years. Spending on risk management and regulatory compliance in the wake of the 2008-09 financial crisis has seen the financial services industry add around 190,000 extra jobs, an investment that came just as profits began to be squeezed across major business lines. The advent of machine learning tools and data analytics now offer major cost savings from automating many jobs.

Special skills sought

Opimas also predicts that the reduction in the size of the workforce will be accompanied by a shift in the profiles of employees, as firms seek to recruit experts in AI, data science and cybersecurity. “Yet hiring people with these skills is increasingly difficult, as the demand for tech experts is currently outstripping the supply,” the report notes.

“The reason: The ideal candidate for the capital markets must have double expertise in business, administration or mathematics and also in specific technologies such as Python, data visualisation, etc. The new gem in recruitment is a candidate that possesses science, technology, engineering, and mathematics (STEM) specialisation.”

The report’s co-authors, Axel Pierron and Anne-Laure Foubert, comment: “Until now, robots have needed human intervention and supervision to develop, maintain, train, update and control the outcomes.

“Some of the more florid predictions are not likely to happen in the short term, but there is little doubt that the workforce of the future in capital markets will shrink in size.

“Experts in AI, data science and cybersecurity, typically drawn to work at tech companies, are entering the financial industry at an unprecedented rate. Since January 2019, more than 35% of the job offers published by US and European sellside [banks] institutions specifically target candidates with a technology profile.”

The report concludes that re-skilling or up-skilling the current workforce is vital and financial institutions are being pushed to diversify their learning and development programmes.

“In their transition to the workforce of the future, financial institutions will face significant challenges and must completely rethink their internal organisation,” say the authors. “Business and talent strategies will have to be aligned from the top, requiring strong support from executives.”

The projections by Opimas tally with other recent predictions of job losses, including a joint report from Singapore’s Institute of Banking and Finance (IBF) and the Monetary Authority of Singapore (MAS).