The Simplex Equities Futures Strategy Fund gained 3.4% in a single day when the Brexit vote signalled the UK’s departure from the EU. However, fund manager Yoshinori Nomura wasn’t the one who predicted it. Rather, it was his AI program that did.
Fund managers can now entrust their software to not only analyse copious amounts of data, but also refine algorithms by themselves over time. With such ease of automation, do we even need humans to manage our money? After all, computers don’t need to eat or drink or sleep, and can process standardised information faster than any human. The first computers already could work around the clock, needing nothing other than electricity and the occasional bug fixes. Now, they are learning to think independently.
Indeed, technology has shaped the course of developments in financial services. Trading on securities exchanges once involved calling brokers standing at the exchange shouting at the top of their lungs to buy or sell (open outcry system). Nowadays, trades can be negotiated and executed online (electronic trading). Technology has made an entire floor of calling brokers redundant, automating this simple task and making the process more efficient.
However, it is far from the end of the world. Humans possess far superior high-order logic and creativity. For example, Google’s AlphaGo AI would hardly be suited for anything other than its original purpose. Even basic tasks, such as managing a factory assembly line, would be too much for AlphaGo to handle. This holds even more truth for tasks that require critical thinking and negotiation (e.g. analysing potential targets for a VC). It can thus be argued that even evolving AI programs would need a human programmer’s touch in order to truly adapt to the situation.
While automation and information technology have slashed jobs for many routine tasks, there are many that still require human involvement. Financial services will continue to evolve, but humans will still have their place in it for time to come.