As more organisations implement generative AI, London is more vulnerable to job losses in the financial sector, according to a new report by the UK Department of Education’s Unit for Future Skills on the impact of AI on jobs and training.
Generative AI is threatening the jobs of financial analysts and business consultants, especially for workers in London and the South East. On the other hand, the North East is less impacted by AI.
There have been different attempts to measure the impact of AI on the job market in the UK. Financial workers would be mostly affected since they would likely adopt the technology. Continue reading to understand more about how AI will affect the financial sector in London.
Study Reveals AI Will Impact Finance and Insurance Sector More
Whether trading on applications like TradingView or analysing investments on financial platforms, there’s no doubt that AI will be involved.
According to a report on the impact of AI on UK jobs and training by the Unit for Future Skills under the Department for Education, the finance and insurance sectors would be more affected by AI than any other industries. Financial specialists can be aided by AI applications like image and speech recognition, language modelling, and translation, which can eventually replace their roles.
Furthermore, generative AI will affect professional occupations in the financial sector rather than jobs that are manual in nature. It would also affect jobs with repetitive tasks. Aside from the finance sector, others include information communication, scientific, public administration and defence, professional, technical, and education industries.
Conversely, the industries that are least impacted by AI include accommodation and food services, forestry and fishing, construction, motor trades, transport and storage, and agriculture industries.
As AI technology advances, many routine tasks and jobs in finance are becoming automated, including reporting, data entry, and reconciliation. London was recognised as the most affected region in the UK because it has a high concentration of professional roles. Since most financial analysts and experts are concentrated in London, it’s no surprise that this city would be the most affected.
Finance Positions Most Affected By AI
Financial analysts are one of the finance positions most affected by AI. AI algorithms are designed to analyse significant financial data, providing insights that can guide investment decisions. Since AI can do this, fewer financial analysts will be needed.
Accounting clerks and bookkeepers are also mostly affected by AI because the technology will automate routine account tasks like invoice processing and data entry. Loan officers are another repetitive job that could be at risk, as artificial intelligence can simplify the loan approval process. AI will automatically check different credit analyses and risk assessments in a jiffy.
Stock and forex traders are also affected by AI. AI algorithms can be designed to analyse market data and execute trades depending on strategies and rules that the trader has set. Different forex trading tools and software also have AI features that traders can benefit from. For instance, TradingView has an AI trading indicator, which would provide a win rate estimate. It also uses a kernel for trade entries and trailing positions.
Algorithm traders are also affected by the introduction of AI. AI in algorithm trading uses sentiment analysis and machine learning to analyse data points and execute trades. Another position, although not strictly in the finance sector, is customer service representatives. AI-powered chatbots can be used to provide users with customer inquiries and provide financial advice.
Financial fraud detection is also an important part of finance and has been influenced by AI. AI-powered fraud detection makes use of algorithms to analyse significant amounts of data in real-time. The AI can point out anomalies and patterns that point towards fraudulent activities.
Keep in mind that while AI automation can reduce jobs in the financial sector, it cannot completely replace human judgement and creativity in different aspects of finance.
What Finance Jobs Are Likely Safe from AI
While financial specialists in London are expected to be affected by AI, other jobs would be less affected by the introduction of AI technology. These roles include financial advisors, risk managers, traders, compliance officers, portfolio managers, investment bankers, financial lawyers, and financial auditors.
Although AI technology can be used to assist those in this position, it cannot completely replace their jobs. Human expertise is very important in AI-driven finance. Finance is not limited to calculations and numbers but also includes human behaviour and risk management. So, a human touch is needed to make strategic decisions.
Also, different aspects of finance require human expertise and intuition; you cannot get this with AI. For instance, to understand complicated regulatory frameworks or the effects of geopolitical events, a human financial professional would do a better job at advising than AI.
Human expertise and judgement are highly needed in managing portfolios. Unlike AI, which might provide generalised consultation, a human can provide personalised advice, reducing risk. With this said, the human touch is still needed in finance, even as AI is used to automate several tasks.
