GEN AI WILL HAMMER BANK EMPLOYEES
The first-time white-collar employees will have tech reduce employment.
A new report shows how GenAI is reshaping the labor market, and the companies most impacted by GenAI will be Banks and Tech, which runs a distant second.
What makes this particularly interesting is that, for the first time, technology is taking away white-collar managerial jobs rather than those of blue-collar workers whose work has been repeatedly disrupted.
👉TAKEAWAYS
🔹The companies that will be most affected by GenAI by their GenAI Exposure scores are concentrated in three sectors:
Finance and Insurance, most notably Morgan Stanley, Bank of America and Northwestern Mutual.
Professional Services, with particularly significant impacts at McKinsey & Company, KPMG and Deloitte.
Information Systems, led by Bloomberg, Salesforce and Google.
🔹Jobs within finance that will be most heavily impacted include: Insurance underwriters, Budget analysts, Accountants and auditors, Personal financial advisors, Credit professionals, Financial analysts, Tax preparers.
🔹The impact if GenAI will be less about automating away tasks than about augmenting workers’ productivity and effectiveness or transforming the definition of job roles altogether.
🔹Early adopters of GenAI will see increased productivity as roles are automated, augmented, or transformed. However, the surge in output is unlikely to meet a corresponding growth in demand for goods and services, leading to overstaffing.
ATM machines provide a window into the kind of disruption that technology can wreak on banking employment. GenAI will likely provide a repeat performance.
👊STRAIGHT TALK👊
Few readers will shed tears for bankers losing their jobs!
Most will see this as just deserts following years of blue-collar employees facing job reductions due to off-shoring or technology simply doing more with fewer employees.
The report's authors make an impossible leap that GenAI’s impact on employment will be temporary:
“While those disruptions will carry a high human cost, they are likely to be only temporary. Corporate profits will increase as firms benefit from decreased payroll costs. In a competitive market, we expect price decreases to follow. Finally, price cuts and new jobs created by GenAI will drive increased demand, and employment will rebound, at least somewhat.”
I don’t believe this one bit, and neither should you.
The analysis depends on imaginary price decreases. Since when have you seen a price decrease?
A more compelling argument can be made that prices increase and corporations pocket the benefits of decreased payroll.
In banking, it’s quite simple and predictable. Senior bankers who survive will make bigger bonuses by maintaining level prices with fewer employees. Has the world changed so much that this will change?
The author’s more compelling argument is that GenAI will create new jobs. This is undoubtedly true, but if technology is any guide, (see ATM graph) the job destruction by GenAI will far outstrip the creation.
Thoughts?
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