Four hundred thousand capital markets jobs could disappear over the next decade as advances in artificial intelligence and technology decimate the workforce, according to forecasts by consultancy Opimas.
While spending on risk management and regulatory reforms in the wake of the financial crisis has led to a huge upward shift in employee headcount over the past ten years, the arrival of new machine learning tools and data analytics kit is set to reverse the trend, with up to a fifth of jobs at risk.
Opimas believes the asset management industry – already under tremendous pressure due to declining management fees and slowing asset inflows – will see some of the greatest cutbacks in the workforce, shedding about one third of its headcount.
While the size of staff in the capital markets will drastically decrease, Opimas also expect a shift in the profiles of employees, as experts in AI, data science and cybersecurity are fought over in a fight to recruit fresh talent.
Opimas points out that since January 2019, more than 35% of the job offers published by US and European sell-side institutions specifically target candidates with a technology profile.
“Yet hiring people with these skills is increasingly difficult, as the demand for tech experts is currently outstripping the supply,” notes the consultancy. “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 visualization, etc. The new gem in recruitment is a candidate that possesses science, technology, engineering, and mathematics (STEM) specialisation.”
To adjust to the changing landscape, financial institutions must implement a new talent strategy, says Opimas, not only because they have to recruit new employees with different skill sets, but also because they have to bridge a talent gap within their own organisations.
“Reskilling or upskilling current employees is a necessity, and financial institutions are being pushed to diversify their learning and development programs,” the consultancy concludes. “In their transition to the workforce of the future, financial institutions will face significant challenges and must completely rethink their internal organisation. Business and talent strategies will have to be aligned from the top, requiring strong support from executives.”