Like many other sectors, the financial services industry has been increasingly disrupted by technology. Financial technology, better known as FinTech, is here to stay, and it could just be a matter of time before some roles in the sector become irrelevant as jobs become automated.
Here are 4 jobs in the financial industry that are at risk of being distrupted by technology.
#1 Financial Advisors
The first on our list is also likely to create the most disagreements, simply because they are so many financial advisors in Singapore.
An article from Yahoo suggests that we have about 20,000 advisors in Singapore, the same number as the UK, despite having a population that is about 12 times smaller.
With the advent of automated advisory platforms, also known as robo-advisors, the role a financial advisor play could start changing in the future.
This isn’t to say that the work they do is not important – it is. Currently, financial advisors play an important role in understanding their clients’ needs and wants, before connecting them to the right financial products.
Going forward however, we could expect this to be done between clients and computers, directly, and without the need for any advisors.
The biggest advantages that robo-advisors have over human financial advisors would be the consistency in the quality of their advice along with their independence. Also, these robo-advisors would make redundant financial advisors who are merely present to sell products, and who do not geninuely value-add to their clients.
Besides being more efficient and convenient, these platforms will drastically reduce overhead costs for financial advisory firms.
However, all is not lost for financial advisors. Industry experts foresee a move towards more complex and specialised financial management. That means knowledgable advisors could find themselves doing more high level work to differentiate themselves from other advisors and robo-advisors.
# 2 Fund Managers
A survey carried out earlier this year by the CFA Institute found that asset management is the sector more than half of the respondents felt would be most affected by automation.
Indeed, key processes in the sector, such as data analytics and stock picking, are increasingly being performed more efficiently by computer programmes.
Quantitative (‘quant’) funds, which use computer-based models to choose investments, are already outperforming their human counterparts. More investors, especially younger ones, are looking towards such technologically-driven funds, preferring their algorithmic strategies for their lack of human bias.
As artificial intelligent solutions continue to be fine-tuned, veteran fund managers are already predicting that humans could soon be replaced.
Also, fund managers were important in the past due to their ability to help investors obtain diversified portfolio. Even that however is being distrupted by Exchange Traded Funds (ETFs) that retail investors can buy at a much lower cost.
Read Also: How Does ETF Investing Work In Singapore
# 3 Stockbrokers
Many investors now buy and sell stocks themselves online, a much cheaper and efficient way compared to the traditional method of calling up a stockbroker to buy and sell for them. Transaction costs still apply online, but are much lower compared to calling a broker.
In addition, investors are now able to source for information and experts insights through the internet without being beholden to a stockbroker for the provision of such information.
# 4 Financial Traders
Robots are now used in over 80% of trade markets. In the last few years, big banks such as UBS, Barclays and Credit Suisse have largely replaced human traders with computer programmes.
And why wouldn’t they? These computer programs are much faster, more accurate and unbiased.
Nevertheless, not all types of traders face a bleak future. Foreign-exchange and credit default swap traders may be dying breeds, but there is still substantial demand for sales traders, who buy and sell large blocks of shares, which algorithmic trading may not (yet) be able to carry out as efficiently.
Adopt & Working With Technology
It is certainly not an easy time to be working in finance. Yet it is possible for finance professionals to resist obsolescence by adopting and working alongside new technology. With robots taking over our daily tasks, this could be the gateway to more value-added roles such as expert trouble-shooters and consultants which we cannot simply program computers to be.
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