Link: http://wallstreetandtech.com/story/showArticle.jhtml?articleID=201800876&pgno=1
This article discusses the extincting role of traders on Wall St,. since new technology is replacing the human capital. The article talks about how increasing technology is not a threat to wall st, but its changing the role of humans, allowing companies to grow and allowing graduate students to use their analytical skills and leave the clerical work to algorithms. Approximately 500 NYSE traders were let go when the exchange moved to partial electronic trading.
The differences can be seen in different roles that humans play in the stock market. For example: Floor Brokers have transformed in to becoming "quants" reports Credit Suisse Dan Mathisson giving example of his own department where people are working with Algorithms to understand stock patterns and trade better while leaving the execution to a computer model.
The 2nd threat is between Brokers/Advisors Vs. the Web. Websites like Zecco.com are allowing individuals to achieve free trades and ananymous blog advice to trade. This reduces the job of Financial advisors and other brokers. As such, some companies say that the technology is actually helping clients and brokers at the same time. The increase in timely trading and facilitation of the process makes the buy side firms like T-Rowe Price very attractive to compete with the higher Investment Banks.
The other difference arising is between Research Analysts and Software. Companies are always looking for statistical softwares which reduces the jobs of research analysts running numbers. But in the end, what ever is necessary to save costs, whether it is outsourcing, or setting up new software algorithms will be welcome but how it shapes the industry is yet to be seen.
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4 comments:
Thanks for mentioning ZeccoShare, the investor social network on Zecco.com. Although still in invitation-only beta, keep you eye on ZeccoShare, great stuff coming soon.
This is an interesting article discussing the job opportunities in Wall Street, in the face of improving technology. I think that due to computers replacing the jobs of floor traders and certain analysts, there is going to be a shift in the jobs being offered. For example there would be an increase in IT related jobs in finance, to create and manage those computer programs. There are also opportunities for floor traders to transfer their skills by acting as consultants or managers, in middle or back office operations. So in the end, there are still great job opportunities in finance, yet there will be a major reorganization of the roles that humans play in the industry.
This article is very interesting. I agree partially with Deepak in the sense that there will be a creation and a need of more IT related jobs in Finance, but also the increasing use of technology is definitely going to suppress many jobs. Clients would prefer to rely on softwares and algorithms, and we have to say that this will be somehow detrimental to many traders or analysts work in the office, or financial institutions. Thus, the technology improvement is a good thing, but it will certainly have some consequences.
Very interesting article, even though there may be increasing threats with the integration of new IT. I think that most of these employees will continually find a way to gain a competitive edge over the other floor brokers. The use of Zecco is an interesting point that I've never heard of before, but at the same time who is to say that trusting a blog's advice towards one's own financials
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