{"id":258523,"date":"2018-07-14T09:18:44","date_gmt":"2018-07-14T07:18:44","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=258523"},"modified":"2018-07-14T09:18:44","modified_gmt":"2018-07-14T07:18:44","slug":"lifehacks-for-when-a-robot-wants-your-job","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/technology\/258523\/lifehacks-for-when-a-robot-wants-your-job\/","title":{"rendered":"Lifehacks for when a robot wants your job"},"content":{"rendered":"
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Can\u2019t code, or speak Bahasa? Didn\u2019t go to school with a CEO\u2019s son or daughter? A robot will take your trading seat. Read on if you want to save your job.<\/p>\n

The threat from automation is in the flows part of banks\u2019 global markets business, the most important chunk of the biggest division\u00a0of investment banking.<\/p>\n

Investment banks garner 70% of their revenue from global markets, made up of trading stocks and bonds, as well as structuring\u00a0derivatives products and financing; the remaining 30% comes from advisory services like shepherding M&As or\u00a0helping companies raise equity and debt.<\/p>\n

The higher-margin areas within\u00a0markets \u2014 from structuring to swaps \u2014 is relationship-oriented, and therefore (relatively)\u00a0safe from robot overlords.<\/p>\n

And it happens to be a big contributor to the 70% pie, especially in Asia, where commissions on equities and fixed-income trades are sinking fast,\u00a0and language and client connections play a big role. Good news? Read on.<\/p>\n

With the flows business comprising\u00a051% of banks\u2019 global markets revenue of $109.8 billion last year, according to Coalition data, automation of even vanilla trades is\u00a0no small threat.<\/p>\n

Besides, the 30% advisory pie of investment banking revenue outside global markets only pays well when banks counsel\u00a0on large cross-border transactions or underwrite big IPOs.<\/p>\n

In Asia, the former is largely a Japanese game since China pulled the plug on deal-making by its overly ambitious conglomerates. And large share sales only happen\u00a0in a few markets.<\/p>\n

India may be the second-biggest destination for cheap Xiaomi phones, but the Chinese firm\u2019s\u00a0Hong Kong IPO probably made more for banks than the entire Indian equity advisory industry will earn in fees this year, as a\u00a0senior finance executive\u00a0told one of us.<\/p>\n

Desks have already shrunk, and will get smaller still. A decade\u00a0from now all trading will be electronic.<\/p>\n

Last year, JPMorgan Chase & Co chairman Jamie Dimon famously boasted of a currency trader that made a $100 million bet\u00a0via a cell phone. That\u2019s the shape of things to come.<\/p>\n

In contrast to the early days of the 2008 financial crisis, when tech was culled to cut costs, digital upgrades are now seen as both an operational necessity and a strategic differentiator.<\/p>\n

Tech spending in global-markets divisions of investment banks has risen to $16.5 billion at the 12 institutions\u00a0Coalition canvassed, from\u00a0$13.8 billion in 2013.<\/p>\n

A chunk of that\u00a0is maintenance of bulky legacy systems, but Amrit Shahani, a London-based research director at Coalition, says\u00a0large Wall Street and European banks are each spending around 10%, or a giddy $1 billion of their annual revenue,\u00a0to\u00a0stay relevant.<\/p>\n

Chief technology officers are\u00a0pushing for even bigger budgets. Their teams are the financial coders who\u2019ve created bespoke systems for Goldman Sachs Group Inc and the like and\u00a0who are increasingly sitting on trading floors so that precious minutes aren\u2019t wasted talking to someone in\u00a0Bangalore when a huge deal\u00a0blows up.<\/p>\n

Contract workers from third-party firms like PageGroup Plc\u2019s Michael Page and Robert Walters Plc are getting seconded for a few years to help run trading floors smoothly.<\/p>\n

Headhunters say a $155,000 salary (excluding bonuses) for someone\u00a0with eight years\u2019 experience isn\u2019t uncommon in Hong Kong, for instance. It\u2019s not exactly banker comp, but it\u2019s rising much faster.<\/p>\n

Beyond the coders are the bankers-cum-traders-cum-tech thinkers.<\/p>\n

Nomura Holdings Inc in February hired Jezri Mohideen, a former senior trader at Royal Bank of Scotland Group Plc and Brevan Howard\u00a0Asset Management,\u00a0to be its global chief digital officer for investment banking.<\/p>\n

Based in Dubai, part of his job is to set up artificial-intelligence labs and merge the old and new worlds of asset custody.<\/p>\n

Talk to any senior banker or trader and they\u2019ll tell you there\u2019s a lot of soul-searching going on amid threats from fintech\u00a0and blockchain.<\/p>\n

The challenges are even more pressing for consumer and private banks, as well as in some corners of corporate lending such as trade finance.<\/p>\n

Barclays Plc\u2019s\u00a0wealth management and investment operations head in the UK is\u00a0Dirk Klee, previously at UBS Group AG\u2019s wealth arm in\u00a0technology and digital services.<\/p>\n

Singapore\u2019s DBS Group Holdings Ltd CEO Piyush Gupta is using open-application-programming interfaces to blur the boundaries between payments and commerce. If he doesn\u2019t do it, Ant Financial\u2019s Alipay or upstarts such as\u00a0ride-hailing service\u00a0PT Go-Jek\u00a0Indonesia surely will.<\/p>\n

In trade finance, using blockchain\u00a0to retire paperwork older than Shakespeare\u2019s \u201cMerchant of Venice\u201d is a project both Singapore and Hong Kong are working on.<\/p>\n

None of this is to say that investment banking is immune. Right now, there\u2019s a rush to hire geeks \u2014\u00a0so they can make other humans irrelevant.<\/p>\n

Most banks are struggling to recruit because they \u201cneed people who not only have the new technology backgrounds but can also see how these can disrupt financial services processes and models,” said Ian Woodhouse, an associate partner at financial services consultancy Orbium.<\/p>\n

So here\u2019s what we think in a nutshell: If you\u2019re trading vanilla fixed-income or cash equities, you\u2019ll only have a job in five years if your dad owns the firm.<\/p>\n

If you\u2019re\u00a0a paan-chewing, vaping kind of investment banker (the FT\u2019s delicious description of Rajeev Misra, who built Deutsche Bank AG\u2019s credit derivatives business), you\u2019ll need to impress someone like SoftBank\u00a0Group Corp\u2019s Masayoshi Son with\u00a0your structuring skills. (Robots lack chutzpah.)<\/p>\n

If you\u2019re\u00a0somewhere in between, learn to code. Or at a\u00a0minium,\u00a0think tech disruption on a very large scale.<\/p>\n

\"\"<\/a><\/p>\n

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Read: How many South Africans could lose their jobs to robots in the next 7 years \u2013 and which skills are safer<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Can\u2019t code, or speak Bahasa? Didn\u2019t go to school with a CEO\u2019s son or daughter? A robot will take your trading seat. Read on if you want to save your job.<\/p>\n","protected":false},"author":59,"featured_media":158555,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9878],"tags":[26],"class_list":["post-258523","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/258523","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=258523"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/258523\/revisions"}],"predecessor-version":[{"id":258529,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/258523\/revisions\/258529"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/158555"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=258523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=258523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=258523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}