Are you obsolete?

Paul Orford

“I am old enough to have caught the very end of the last revolution, having started in an era of manually writing out trade tickets and having paper based databases to work from. CRM’s were not commonplace, with your desk comprising a telephone, pen, A4 paper and a list of numbers to call” – Paul Orford

Paul Orford is Head of Institutional at AMB Prime

Over the past 18 months or so the 4th industrial revolution has come more and more to my attention. In case you were not aware of this term, a great place to start is reading is the book with the same title by Professor Klaus Schwab. He outlines that the fourth revolution will be massively different from the previous three.

He argues that this range of new technologies that combines the physical, digital and biological worlds will impact all disciplines, economies and industries.

With the increasing presence of automation replacing workers in a vast spectrum of industries, some estimates arguing that 47% of US jobs being at risk from the coming automation in the next 30 years, we will see tremendous changes in the world economy.

As with every industry, progress and development are what drives us on to new heights and advancements. However, how could this reflect upon our industry?

I am old enough to have caught the very end of the last revolution. Having started in an era of manually writing out trade tickets and having paper based databases to work from. CRM’s were not commonplace, with your desk comprising a telephone, pen, A4 paper and a list of numbers to call.

I remember the rancor from the old guard when they were shown this new thing called a website, and how they all thought that the industry would never change. Back then a sales / trading floor was incredibly labour intensive, with vast swathes of people carrying out tasks which would only take seconds in any standard office currently.

For example, I would have a junior working for me on the bustling noisy testosterone fueled sales trading floor. Part of his role was to stand by the fax machine and wait for the client’s documents to be sent. I would always like to watch their faces as the fax machine came to life. Seeing their beaming smile when they could see the client’s documents to come through. It was akin to an expectant father seeing their new born for the first time.

The second reflex action of the junior was with metronomic precision they would open page 10 of the faxed document outlining the client’s net worth. From their facial reaction I could see how the rest of their day would pan out!

Even going from that iteration to the following one of a retail brokerage. Opening an account via the website and making payments via the site instead of having to only have the ability to receive funds by bank wire seems like a million years ago. However in reality it is only a small space of time.

When I look at the next leap forward, it is easy to be like the previous generations who thought that the advancement of technology would never affect them. If you have that frame of mind you are going to be in for an incredible shock.

The whole industry is moving towards automation. This is a dream for shareholders and owners in any venture, as there are far less expenses and less human issues to deal with on a daily basis. With the new technology streamlining of your entire companies ecosystem, what will the role of the employed staff member be reduced to?

Once a solid and efficient proposition arrives for automated support and compliance software, these departments will be the first to experience the transition. Perhaps the only roles left would be there to satisfy a local regulator, in solely offering adequate software supervision.

This is already a reality if you have tried to use a Crypto exchange. Although I found my experience to be incredibly frustrating with this first generation software. Once this is developed further, these roles will become just memories of the current holders..

Moreover, other roles which we believe can only be carried out by human to human interaction, such as sales, may also appear under threat. Once our paradigms of reference move in the future with regards to relationships and interaction, this will also adapt as our relationships with technology changes.

If you analyze how we have conducted business over the last 150 years, it has evolved through having the challenge of just maintaining a local exposure due to technological constraints, the introduction of the telephone and the integration of the internet and related apps have made us move away from personal human contact with each move forward.

Moreover, with AI advancing at such a fast rate, the risk management department will see radical changes, with the holders of any position in this department acting in a mere observational / passive role to make sure that the AI is functioning efficiently.

Much like a security guard monitoring the stores cameras, this role could be reduced to no more than a low skilled observational task, something which is far removed from today’s role.

Although this may appear to be a dystopian vision of the future, it is one that you will have to embrace and to adapt in the brave new world that is coming. Moreover, to read the above and assume that no new forms of labour would appear would be wrong, as new specialties arise.

Much like any new technology, there will be new industries and forms of employment that we cannot envisage now. To speculate on these would be like asking someone who was trepanning in the Middle Ages, what their thoughts on 21st century brain surgery would be.

I would prescribe that to ensure you are on the right side of history, you will have to be relevant to your era and not be afraid of the coming changes and embrace them.

In the famous words by Adele ‘See you on the other side!’ (But I am sure we will not have to call a thousand times as the AI will take care of it.)

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