How to Avoid Becoming Obsolete in Your Financial-Sector Career
Think of finance industry innovations you might enjoy as a customer — ATMs, online banking, digital wallets and more — and there is a long line of displaced workers who didn’t see the technology coming. Much more is in the works, from peer-to-peer loans, which bypass the bank entirely, to a proliferation of apps that speed or simplify a long-standing financial service. Those portend job disruptions, too.
So how do you navigate a career in finance when the field itself is bucking, bronco style?
Researchers are on your side. A quartet of scholars at Columbia Business School, Georgia State and the University of Florida recently studied which jobs are most at risk. Their strategy was rather brilliant: They analyzed fintech patent filings and cross-referenced them with job descriptions.
Which careers are at risk
Though they foresee the displacement of many employees, there’s a pattern: The jobs most at risk are middle-range salaried roles, the sort typically held by people in their late-30s and 40s and 50s, with college degrees. You know, the dead center of many finance career paths. Workers at either end of the spectrum, with only high school degrees or with advanced degrees, will be least affected, in the researchers’ view. The technologies causing the most disruption are data analysis, blockchain and robo-advising, meaning that you should pay attention if these cut across the path of your work.
Don’t worry about the financial companies themselves. They, of course, will be just fine, says co-author Wei Jiang, a professor of finance at Columbia Business School. Mainstream financial institutions will do things like acquire or partner with many fintech firms — or copy them and swipe their talent (fintech tends to attract the best and brightest). But overall, financial companies, big and small, will be fine.
“They’re beneficiaries of the disruption. Firms just turn and run in a different direction, and hire a different kind of labor. It’s individuals who can get left behind,” Jiang says.
How do these changes affect your job?
To avoid this lonely, non-lucrative fate, Jiang suggests that you be “a bit forward-thinking,” and ask yourself these questions:
—In my field, where is tech innovation headed?
—What kind of jobs will that technology disrupt?
—How can my skills complement that technology, rather than be replaced by technology?
For example, take the ever-expanding robo-analysis of the stock market. “You cannot compete with a computer in terms of processing the volume of information, right?” Jiang says. “So you should rely on that machine assistance.”
The human advantage
And figure out what you bring to the table. Humans hold two big advantages over robo-analysis: institutional knowledge, such as understanding a company’s history of product recalls or awareness of the quirks of a particular CEO. And humans are superior at foreseeing market changes like distress or crisis or inflation,by seeing and assessing cues. “The machine never knows when we’re standing on a cliff,” Jiang says. The idea is to combine your skill with machines’ superior information-processing capabilities, in a role such as stock analyst.
Humans also build relationships and trust with clients, which have long been the foundation of client attraction and retention at financial firms. Now, however, your clients may have shiny new robo-advising apps that they look to for market insights, and more will be single and widowed women wanting advice that fits their goals and life approach.
Following a few guidelines will keep your employable:
—Predict future job skills, not firms. You’ll drive yourself batty trying to guess the winds of the industry, but you can certainly identify which abilities and know-how will be pivotal.
—Learn tech and finance. “These combo skills are in the highest demand,” Jiang says. At the behest of corporate executives begging for executives who know their way around AI, Tech MBA programs have sprouted in recent years.
—Watch your region’s specialties. “Certain areas become hubs of some kinds of technology,” Jiang says. Though fintech seems like a field that you could work in from anywhere, Jiang’s research finds that in practice, geography matters, and your skills need to be specialized for the local market.
—Stick to mainstream companies. Peripheral companies, both in terms of industry and region, are more likely to be shaken by emerging technologies.
And always expect turbulence. With a little foresight, you’ll survive just fine. Good luck out there.