Hundreds are being rendered jobless every day with the rise of digitisation or automation in the finance industry.
The fourth industrial revolution is underway and it’s threatening to make nearly half of the World’s population jobless. And it is taking its toll in the finance industry
The latest round of industrial revolution is characterised by intelligent robots and machine learning hence it is going to be easy for it to completely reshape the jobs market.
Stefan Hajkowicz, who is the principal scientist at the CSIRO, says it’s white collar workers who are about to feel the pain.
Start-ups threatening existing jobs
Take for example, Australian financial start-up Stockspot. Its business model makes thousands of highly paid jobs obsolete, making the individual jobless. It claims that by using algorithms and automation instead of people, they can provide better financial advice at a cheaper price.
Chris Brycki, founder of Stockspot, is of the opinion that some jobs, particularly in the financial service sector, do not add any value.
“Finance industry employs about 10 per cent of our workforce and, really, a lot of those jobs are unnecessary,” he said. Furthermore he adds that a lot of research analysts, stock pickers, stockbrokers, don’t actually add any end value for the consumer.”
Disruption in the Finance Industry Will Only Increase in Next Few Years
Mr Hajkowicz claims that the technology behind digital currency bitcoin — known as blockchain — also threatens to seriously shake up the industry.
He explains that the blockchain and distributive ledger technology, if it plays out the way we think it could, then this technology that sits behind the bitcoin currency could be used for smart invoicing or auditing processes. In short, it can turn 100s of auditors jobless.
The job losses in finance industry have already begun, with Westpac reducing its headcount over the last year. However, the real hit is still to come.
A Macquarie analyst recently predicted the big four might look to shed 20,000 jobs over the coming years. And it has already begun in parts of the world. In the decade following the great recession, the banking workforce in the US dropped by around half a million people.
He furthers adds that a lot of people are still in the stale jobs in banks and it’s not until the banks will have to lay off people in the next few years which will eventually lead to really flourish the disruption in the financial tech industry.
Big Tech Giants
It’s not just start-ups who are threatening the existing business models. The big tech giants are also continually innovating and threatening to push further into the finance space.
For ex, with its technology to facilitate the transaction Apple could be better placed to be a bank or maybe Google than an actual bank because it has technology to facilitate the transaction.
Soon, young people who are thinking, what are the currently lucrative career options (in the finance sector) will be forced to reconsider.
The current situation is what would be the boiling frog syndrome
You may not realise it but we’re already seeing some jobs disappear, however some jobs are being restructured because of automation and digitisation.