Concerns that artificial intelligence (AI) could be coming for the jobs of junior bankers have been revived by annual shareholder letters from Wall Street chief executives.
JPMorgan’s Jamie Dimon tackled the topic at length, noting that he has mentioned AI in each of his shareholder letters since 2017.
“We anticipate that our use of AI has the potential to augment virtually every job, as well as impact our workforce composition,” Dimon said. "It may reduce certain job categories or roles, but it may create others as well."
JPMorgan now employs more than 2,000 machine-learning experts and data scientists, up from 900 in 2023, for example.
It also created a new role of chief data and analytics officer last year, reporting to Dimon and president Daniel Pinto.
Teresa Heitsenrether, who got this plum job, is actually an experienced banker – she has run both prime brokerage and securities services at JPMorgan – rather than a technology specialist.
Her move into a new (or at least upgraded) role dealing directly with the two top managers at JPMorgan should therefore inspire younger bankers who might be worried about the impact of AI on their jobs.
The important thing isn’t to ask what AI can do to you, but what it can do for your career.
The important thing isn’t to ask what AI can do to you, but what it can do for your career
AI will certainly take up the burden of many of the duplicative tasks such as presentation revisions that are performed by junior bankers. Updating pitch books at odd times of the day or night has long been viewed as a rite of passage for young bankers, rather than a useful function, and increased automation will no doubt simply introduce a new form of hazing for Wall Street recruits.
An ability to bluff about the transformational impact of AI could become part of this fresh initiation process.
Alternatively, junior bankers could position themselves to protect their bosses from AI hype and related spending.
David Solomon of Goldman Sachs provided a balanced take on AI in his recent shareholder letter.
“There’s no question that generative AI is going to disrupt a wide range of industries,” he wrote. “But I believe it’s important to keep perspective. Adoption rates will lag, the most fascinating use cases are in their early stages, and a lot of work still needs to be done in data security, regulatory frameworks and ethical considerations for the technology to reach its full potential.”
By the time he came to discuss Goldman’s first-quarter earnings on a call with analysts, Solomon couldn’t resist taking it up a notch, however.
“Today, we are proud to be at the forefront of advising clients on these topics and how to think about potential use cases in their operations. As we look longer term, to the extent that this technology develops in line with expectations, there will be significant demand for AI-related infrastructure, and as a result, financing, which will be a tailwind to our business,” he said.
So, what do the machines think of Solomon’s ability to profit from the trend of the day?
When quizzed by Euromoney, OpenAI’s ChatGPT bot gave him a qualified endorsement.
“It's reasonable to assume that Solomon and his leadership team have sought to develop a deep understanding of AI and its implications for the firm's business strategy,” the chatbot said.
It nevertheless felt that Goldman might need some professional help – perhaps from OpenAI and its business partner Microsoft.
“It's worth noting that understanding AI comprehensively requires ongoing learning and adaptation due to the rapid pace of technological advancement in the field,” ChatGPT said. "As such, Solomon, like many business leaders, may rely on expert advisers and collaborations with technology teams to ensure that Goldman Sachs remains at the forefront of AI innovation within the finance industry."
It seems Solomon might need some sharp, young, tech-savvy bankers from Goldman to make sure he doesn’t get ripped off by his own AI suppliers.
