AI technology to replace 90,000 buy-side jobs by 2025

New report predicts artificial intelligence will replace 230,000 jobs across capital markets globally by 2025.

By 2025, artificial intelligence (AI) technology will reduce the number of employees in asset management globally by 90,000, according to research.

A new report authored by research and consulting firm, Opimas, found employees in capital markets globally will decrease by 230,000 and the asset management industry will likely shrink the most as a result of AI implementation.

“AI will intensify clients’ disenchantment with traditional asset managers and lead them increasingly to cheaper and automated strategies,” it said.

The report explained AI technology, including robotic process automation, machine learning and cognitive analytics, will significantly reduce headcounts across financial services firms.

“Securities services firms, given the repetitive nature of many tasks conducted by them, are ideal candidates for a contraction of staff due to the rollout of AI technologies,” it added.

Spending on AI technology in capital markets is expected to reach $1.5 billion this year and $2.8 billion by 2021.

AI applications have huge potential for business units across the broader capital markets, largely improving operational efficiency and reducing costs significantly.

Opimas said: “AI is still in the learning stages; it can’t yet adapt to every scenario and all situations, but it will happen. AI technologies—specifically cognitive analytics and machine learning—have the potential to reshape the financial industry, becoming the building blocks to establish a new business model.”