The world of finance and investing tends to change very slowly. However, it seems like we are on the edge of a few significant shifts in the way big banks will work, some of which are likely to impact your first job.
At AmplifyME, we have looked into our crystal ball to identify what finance might look like in five years’ time.
1. AI will power everything.
There’s an old joke that Artificial Intelligence is every technology that doesn’t work yet. Once it starts working people call it a database, or a logic model. Call it what you will, but AI is being used across all areas of finance. From using sentiment analysis and natural language processing to get the edge in investing, through to chatbots and less bias credit ratings, AI is making the job of banking quicker and easier.
This trend will only accelerate. In five years’, there will be AI applications that we haven’t even thought about. AI will likely be able to prepare pitch decks and complete financial models. This means that the skillset of an analyst will likely change, from the drudgery of creation to the more enjoyable editing of automated outputs.
2. But relationships will still matter.
Contrary to science fiction, the robots are not coming to take your job. In fact, technology has tended to liberate us from mechanised tasks, giving us the opportunity to do things that only humans can do. This means that jobs in finance will start to diverge – either you become an engineer, working on managing and developing AI, or you focus on the softer side of banking.
Back in the day, the bank manager used to be one of the most public figures in any town. They were relationship managers who used their EQ as well as their IQ to build business for their bank. Banks will need more analysts with a deep knowledge of finance, and the ability to understand the needs of their clients, to match potential customers with the right technological solutions.
3. Finance will start to get decentralised.
Let’s face it, the crypto bubble has well and truly burst and with it much of the hype surrounding decentralised finance (or DeFi). However, much like a well-timed forest fire, much of the hype has been razed to the ground, allowing the real game-changing technology to surface.
Decentralisation, where ownership is defined through a trustless ledger (as opposed to the TradFi centralised banking system) has the potential to revolutionise finance. From seamless cross border transactions, through to immutable ownership rights, DeFi is here to stay. As a new analyst, it would be wise to look beneath the hype of Cryptocurrencies and NFTs and into the fundamentals of blockchain to better understand the opportunities for banks and investors.
4. Big banks will still dominate.
You may (or may not) have seen big banks like JP Morgan buying up pockets of land in Decentraland, a well-known metaverse. Although DeFi promises a world without large banks, the reality is that these large banks have the deposit base, brand recognition and balance sheet to ‘recentralise’ DeFi.
Exchanges such as Coinbase are already extremely good at centralising decentralised finance. As customers, we like dealing with institutions, ‘human’ customer support and registered offices. Therefore, it remains a safe bet to align yourself with a bulge bracket bank in the early years of your career.
5. Sustainable investing will continue to grow.
Is it possible to do good and make money? The planet is holding its breath, betting that trillions of dollars can be allocated to ‘green’ the economy. Sustainable investing has reached a tipping point across all areas of finance and investing – from ‘nice to have’ to ‘must have’. Pressure is coming from all angles; customers, regulators and employees.
As a young analyst, you will need to be clued up on sustainable finance. Tens of thousands of new jobs will be created in sustainable finance – from sustainability auditing and reporting, through to carbon trading and green bond issuance.
If you're at school, and have a free summer (especially if you are in year 12), take a look at Amplify’s WorkX programme – a fully immersive one week work experience, giving you an insight into lots of different roles within finance.
The world of finance and investing tends to change very slowly. However, it seems like we are on the edge of a few significant shifts in the way big banks will work, some of which are likely to impact your first job.
At AmplifyME, we have looked into our crystal ball to identify what finance might look like in five years’ time.
1. AI will power everything.
There’s an old joke that Artificial Intelligence is every technology that doesn’t work yet. Once it starts working people call it a database, or a logic model. Call it what you will, but AI is being used across all areas of finance. From using sentiment analysis and natural language processing to get the edge in investing, through to chatbots and less bias credit ratings, AI is making the job of banking quicker and easier.
This trend will only accelerate. In five years’, there will be AI applications that we haven’t even thought about. AI will likely be able to prepare pitch decks and complete financial models. This means that the skillset of an analyst will likely change, from the drudgery of creation to the more enjoyable editing of automated outputs.
2. But relationships will still matter.
Contrary to science fiction, the robots are not coming to take your job. In fact, technology has tended to liberate us from mechanised tasks, giving us the opportunity to do things that only humans can do. This means that jobs in finance will start to diverge – either you become an engineer, working on managing and developing AI, or you focus on the softer side of banking.
Back in the day, the bank manager used to be one of the most public figures in any town. They were relationship managers who used their EQ as well as their IQ to build business for their bank. Banks will need more analysts with a deep knowledge of finance, and the ability to understand the needs of their clients, to match potential customers with the right technological solutions.
3. Finance will start to get decentralised.
Let’s face it, the crypto bubble has well and truly burst and with it much of the hype surrounding decentralised finance (or DeFi). However, much like a well-timed forest fire, much of the hype has been razed to the ground, allowing the real game-changing technology to surface.
Decentralisation, where ownership is defined through a trustless ledger (as opposed to the TradFi centralised banking system) has the potential to revolutionise finance. From seamless cross border transactions, through to immutable ownership rights, DeFi is here to stay. As a new analyst, it would be wise to look beneath the hype of Cryptocurrencies and NFTs and into the fundamentals of blockchain to better understand the opportunities for banks and investors.
4. Big banks will still dominate.
You may (or may not) have seen big banks like JP Morgan buying up pockets of land in Decentraland, a well-known metaverse. Although DeFi promises a world without large banks, the reality is that these large banks have the deposit base, brand recognition and balance sheet to ‘recentralise’ DeFi.
Exchanges such as Coinbase are already extremely good at centralising decentralised finance. As customers, we like dealing with institutions, ‘human’ customer support and registered offices. Therefore, it remains a safe bet to align yourself with a bulge bracket bank in the early years of your career.
5. Sustainable investing will continue to grow.
Is it possible to do good and make money? The planet is holding its breath, betting that trillions of dollars can be allocated to ‘green’ the economy. Sustainable investing has reached a tipping point across all areas of finance and investing – from ‘nice to have’ to ‘must have’. Pressure is coming from all angles; customers, regulators and employees.
As a young analyst, you will need to be clued up on sustainable finance. Tens of thousands of new jobs will be created in sustainable finance – from sustainability auditing and reporting, through to carbon trading and green bond issuance.
If you're at school, and have a free summer (especially if you are in year 12), take a look at Amplify’s WorkX programme – a fully immersive one week work experience, giving you an insight into lots of different roles within finance.
Stephen Barnett Head of Schools
+44 (0) 203 372 8415
info@amplifyme.com
