Artificial intelligence is reportedly being leveraged by Wall Street firms to potentially help and/or replace employees with certain workloads, with entry-level analysts immediately at risk, as reported by the New York Times.
Wall Street and investment banks, who have been accustomed to cultural shifts for a while, are starting to embrace generative artificial intelligence as a burgeoning technology that has the potential to replace entire workforces rather than just augment existing ones.
(Photo by ANGELA WEISS/AFP via Getty Images) The New York Stock Exchange (NYSE) is pictured on August 31, 2020 at Wall Street in New York City.
The analysts working at the bottom of the investment banking ladder, who devote endless hours to mastering the fundamentals of corporate finance, including the complexities of bond sales, M&A transactions, and public offerings, are the ones whose employment is most immediately at risk. Presently, AI can complete a large portion of the task quickly and with a lot fewer complaints.
According to many sources with knowledge of the situation at Goldman Sachs, and other banks, big businesses are debating whether to hire fewer new analysts as Wall Street becomes increasingly reliant on artificial intelligence.
Others claim that hiring junior investment banking analysts may be cut by up to two-thirds and that those who are employed might make less money because AI would be assisting them in their work.
Human Analysts Still Needed
The program, code-named "Socrates," is being implemented inside banks and has the ability to not only practically eliminate the need to hire thousands of young college grads but also significantly change the course of a Wall Street career.
Chief strategy officer for technology, analytics, and innovation at Deutsche Bank Christoph Rabenseifner said replacing junior employees with AI is an "easy idea," but he also pointed out that maintaining human workers would still be required.
While Wall Street analysts could be on the verge of being replaced with AI, a new study recently claimed that AI can also be used to replace humans in market research.
AI Market Researchers
Under the direction of scholars Miklos Sarvary from Columbia University, Noah Castelo from the University of Alberta, and Peiyao Li and Zsolt Katona from the University of California, Berkeley, the project explores automated market research made possible by cutting-edge AI technology.
The study demonstrates that LLMs can generate results that are similar to those obtained from human surveys by utilizing their sophisticated language capabilities. Researchers saw agreement rates ranging from 75% to 85% by comparing agreement rates across human- and LLM-generated data sets.
Peiyao Li highlights how flexible LLMs are when it comes to text production, especially when it comes to automated market research. LLMs provide an innovative method of perceptual analysis for a range of product categories by efficiently interpreting prompts and producing text responses.
By using easily accessible data from the internet, the research approach developed by the paper authors enables market researchers to perform research using only LLMs.
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