INSUBCONTINENT EXCLUSIVE:
By Lananh NguyenRobots have replaced thousands of routine jobs on Wall Street
Now, they’re coming for higher-ups.
That’s the contention of Marcos Lopez de Prado, a Cornell University professor and the former head
of machine learning at AQR Capital Management LLC, who testified in Washington on Friday about the impact of artificial intelligence on
The use of algorithms in electronic markets has automated the jobs of tens of thousands of execution traders worldwide, and it’s also
displaced people who model prices and risk or build investment portfolios, he said.
“Financial machine learning creates a number of
challenges for the 6.14 million people employed in the finance and insurance industry, many of whom will lose their jobs -- not necessarily
because they are replaced by machines, but because they are not trained to work alongside algorithms,” Lopez de Prado told the US House
Committee on Financial Services.
During the almost two-hour hearing, lawmakers asked experts about racial and gender bias in AI, competition
for highly skilled technology workers, and the challenges of regulating increasingly complex, data-driven financial markets.
Other comments
from the hearing:
Kirsten Wegner, chief executive officer, Modern Markets Initiative:
“As bad actors become more sophisticated, it is
vital that financial regulators have the funding resources, technological capacity and access to AI and automated technologies to be a
strong and effective cop on the beat.”
Martina Rejsjö, head of Nasdaq Surveillance North America Equities, Nasdaq Inc.:
Nasdaq runs more
than 40 different algorithms, using about 35,000 parameters, to look for market abuse and manipulation in real time.
“The massive and, in
many cases, exponential growth in market data is a significant challenge for surveillance professionals,” she said
“Market abuse attempts have become more sophisticated, putting more pressure on surveillance teams to find the proverbial needle in the
data haystack.”
Rebecca Fender, senior director, CFA Institute:
Forty-three percent of CFA members and candidates expect their roles to
change significantly in the next five to 10 years, according to a survey of more than 3,800 respondents
The three roles most likely to disappear are sales agents, traders and performance analysts.
Charlton McIlwain, professor of media, culture
and communication at New York University:
“Racial groups that are already extremely underrepresented in the financial services industry
will be most at risk in terms of automation and the escalation of fintech development
This is especially true given the vast underrepresentation of African-Americans and Latinx in the adjacent technology sector workforce.”