Man and Machine: Adapting to the Age of Automation

Author

Michael Todd

Associate

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Rise of the Robots

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As the 21st century rumbles along, there has been one topic that has been increasingly on the lips of economists and market analysts more than any other; the opportunities and challenges that automation will bring as the technology behind it continues to improve. New technologies such as machine learning and neural networks[1] promise to allow automation to be applied to a wider variety of processes than ever before, impacting the economy on a scale comparable to a new industrial revolution.

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For human workers, this new revolution can seem rather daunting as automation slowly edges its way into areas that were previously considered the safe provision of human beings. Automation is no longer affecting just the more physically orientated industries such as agriculture and manufacturing, but is also now beginning to take over the roles of many more complex and high paid white-collar jobs in the financial and legal sectors as well[2]. Goldman Sachs alone has reduced the size of its New York US cash equities trading staff from about six hundred traders in 2000, to just two[3], with increasingly advanced trading algorithms having taken over most of the work.

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Employer outlooks on AI and Automation:

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30 June 2017

Technology

From “The i-Team: The client perspective on AI”, Legal Business.co.uk

 For employers, the considerable benefits of automation in terms of not only cost savings but also cutting out the risk of human error are obvious. But with those benefits can come several challenges for employers as well; automation can require significant start-up costs and massive structural changes to integrate automated systems across processes. Automation of more simple tasks, often those done by lower-paid, entry level workers, also threatens to hollow out the traditional corporate structure through which employees gain experience and develop skills required for more specialised and complex roles[4].​ 

Learning to Adapt

Even as automation brings new challenges for both workers and employers, it will also bring with it new opportunities to adapt to change. As technology inexorably moves forward, adapting the skillsets and shape of your workforce will become not just advantageous, but necessary.

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Although the number of processes that can be automated with ease is high, the majority of these are monotonous, repetitive tasks which do not directly contribute to wealth generation and occupy workers’ time which could be better spent elsewhere[5]. For many banks, in both retail and investment, this will mean more time can be spent engaging directly with customers[6].

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By cutting these basic processes out of the roles of human workers, they are free to pursue other, more complex and productive activities which generate greater value for the company. This allows for the optimisation of various roles within a firm, increasing the value of the output of individual employees. Among top tier investment banks, Goldman Sachs and JP Morgan have already begun utilising advanced automation methods to reduce the workload on their elite dealmakers and free up time for other tasks[7].

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However, as workers whose roles are taken over by automation are reassigned to more specialised tasks this will require, in turn, for more advanced training than is currently required; 3 out of 4 businesses expect that automation will require new skills from employees according to the Manpower Group report [8].

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From “Top Ten Skills To Beat Automation”, Forbes.com

This presents employers with the rather daunting task of providing more costly and focused training for wide sections of their workforce as they transfer them to new positions[9]; Morgan Stanley, among others, has already taken steps towards reskilling its workforce[10]. This will also increase the required skill threshold for new hires across various roles, making recruitment more difficult for both companies and employees alike.

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The factors will shape the future workforce to be leaner, less focused on minute tasks and possessing more highly developed skills. The result will be a greater demand for workers to possess advanced skillsets that can easily be transferred from prior roles into new ones. Whilst automation can offer reduced costs in many areas, it also presents a challenge in terms of training and acquiring the necessary talent to fill new roles.

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The Solution?

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With its unique business model, FinTrU is well placed to take advantage of this new landscape and the opportunities it brings for both the firm and its clients. For companies looking for a cost-effective solution to obtaining the skill sets they need to embrace the automation revolution, FinTrU offers them access to our dedicated and experienced teams of analysts who can provide the high-quality performance that this requires.

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By bringing onboard the additional talent and capabilities of FinTrU’s analysts, our clients will find it easier to restructure their internal workflows to improve performance through both new technologies and new business models. Our experienced analysts have already assisted several of our clients in taking what were previously entirely manual processes and automating them and shifting them to more low-cost locations, making these processes leaner and greatly increasing their value to the client.

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The challenges presented to the traditional business model by new technological developments will no doubt prove highly disruptive for both companies and their human workers; employer behaviours that were successful in the past may no longer be as effective[11].

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But the rise of automation facilitates human labour to not only remain relevant but also to prove a vital resource for future success. Those companies that manage to grasp these opportunities and learn to adapt by adopting new business models and open new ways of utilising both technological and human resources will be able to thrive in response to oncoming change.  

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Sources

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