Having a discussion with a friend. We will both graduate with a Finance master's degree but over the past few months I have become more involved with coding and the online business world and now see more potential in that than a career in Finance. The reason is that, as I see it, the Financial industry keeps shrinking in terms of jobs and pay due to increasing automation and increased competition from countries like India. Also, demand for employees with tech-backgrounds will probably increase much more relatively speaking. Frankly, it seems like a very bad time to start a career in any field, but the financial industry especially could or is already getting very bad.

Graphs like this seem quite frightening:



Also:

And this is in a bull market. What if this technological transition is very non-linear and a recession or other catalyst hits?

It would be very interesting to hear from industry insiders and others who are knowledgeable about how bad they think it is or will get in the coming 10-20 years.

You sure this doesn't include bank employees? Branches have been closing everywhere. 10,000 since the GFC = 10 employees each? = 100K net job loss from there alone. Given that the average layoff in that graph is maybe 3000/month, that's a big chunk right there.

I'm not in the industry but high end coding/math skills with your finance degree makes the above irrelevant imo. These will also be the last skills to be ceded to robots.

You're probably right that most of these lay-offs are relatively low-skilled employees but even then the trend is downwards for the higher-skilled as well which I can only imagine will accelerate. This has to go beyond bank tellers:



Fewer jobs available for people with only a Finance degree as there will also be an influx from more technical fields such as CS/AI. I can't imagine what a recession would do.

Our math skills are on par with CS/AI-graduates at best I would say, Finance is a lot of regurgitating old models. We have no (formal) background in coding. I started it a couple of months ago out of interest and have done it more full-time the past 1-2 months.

Basically, I'm trying to gauge how good of an idea it is for an intelligent and ambitious person to start a career in Finance now in light of other options (such as a hard switch to coding).

Making a start at the top of an economic cycle in a highly competitive, low skill industry without something to separate you from the pack is never the best idea. You're gonna be the first to go in a recession.

Lots of fund and bank guys here. Hopefully they have good data for you. I'm not convinced your graphs are enough for the point you're making.

Commercial consulting could be an option. Find a firm that is pressing things technologically and still leverage your degree and background.

What do you like the most? Choose that

If you think having a finance job would be fun, go for that

Both options will be good enough to give you a comfortable living if you are smart. And taking a job is more care-free than being independent.

But if you are ambitious, want to achieve great things, you need to do something that gives you an edge over other people. Either knowing something that you know that other people dont(Knowledge edge that comes from deep-diving in a niche topic), or doing something that not many people can( Skill edge I.e great coding skills in new programming language)

Many many people have degrees in finance as it is part of a standard uni program so there is little edge there. Its very competitive. If you enjoy it go for it of course. You will make enough money to live relatively comfortable but no chance to get rich.

Coding gives you more general skills that you could use to find an edge in something. So if you like coding I would def go that way. Much more upside. Then later you can try to find a niche that is uncompetitive (Not part of std uni program) but usefull to society. (Most likely to find this in new things, technology.) This advice is maybe more suited for other people who are at start of uni as its better to start early. Best is to go deep in something that you really enjoy (So becoming good at it will come naturally) and with a high entry barrier (Takes a lot of time to learn) otherwise it will get competitive fast. This way once u become one of the best in your niche you will have a sustainable edge for many years to come. Some examples of people I know who are doing very well: Top poker player in 2-7 draw. , professional knitting pattern maker, ethereum developer, podcaster in niche topic.

couple things:

you're looking at aggregate stats that includes tellers. Like cashiers its a bit of a threatened carerr.

you're starting at the top. there was a huge expansion of finance jobs in 2002-2008 whcih was a tell of the bubble. so could be this is all part of the normalization

Although I actually think you are right that some jobs are going to india, but most arent. that said you aren't exactly asking us to choose between finance and cashier. coding is obviously becoming more and more of a + and coupled with your masters background your field within finance should you choose to be more of a data analyst or quant guy should be amongst the last to be automated or outsourced.

ps. out of all my college friends (graduated 2008) who I stayed in touch with i've heard of no one whos lost their job due to automation/outsourcing. thats just anecdotal of course

Define "finance career"

Hard to see going into IBD out of undergrad as a mistake. Its probably one of the best jobs you can get

It's a good thing that you're thinking about automation risk, but I think that instead of focusing on exposed industries you should focus on exposed jobs. Almost every industry is heading for a automation disruption, but every industry will also have roles that aren't at risk. Focus on developing skills for a role that requires judgment and decision making, not task execution, and you'll probably be ok in most industries.

industry is shrinking in manpower, or as my PM would say...people power. but its more valuable and leveraged. depends how good you want to be.

you have a masters in finance. any economics?? Im not even sure what that degree would consist of. you just do a cfa at that point. anyway im drawing blanks. Someone with a decent masters in this area should be able to print it

Sort of grunching

I’m at a major financial institution that is pretty aggressive in terms of utilizing tech to cut costs.

Your skill set is relatively safe for now and when/if your role does become automated if you’re bright and good at what you do it should be fairly easy to move within the bank to a different sector. These places love filling jobs using internal resources, it’s pretty easy to move around once you’re in, at least from what I’ve seen.

Just wanted to come here and definitively say no.

You can still make it, but we are at the top of that industry. AI will run it in a decade or two.

Study economics and modern finance with an open mind if you want, they are important subjects. But I think Neoclassical Econ and MPT are breaking.

Study a STEM field and do something multi disciplinary.

I think BME is pretty cool.

All of the points made about AI/sexbots/automation are worth remembering. But this is still an industry where you can make a lot of money within only 5-7 years (of course, you almost certainly have to be willing to work hard, work smart, and embrace some variance).

Sure, you can say that about tech/whatever too, but I still think a qualified person's chances are better in the finance field (at least for now + medium term). To put some numbers behind it, by starting as a mere analyst/associate, there are several paths from there that have you making ~$200K/year by year ~3 (if you're sufficiently talented and can put in the work).

Of course, what else besides money is important to you?

Be honest with yourself about your own talent and skill set. What does the fact that you decided to get a master's in finance say about your skills?

This is a good point. But here is the truth about that industry as a whole: it has reached a typing point where it is more rent seeking than adding value.

It adds plenty of a value, and credit and capital are hugely important. But to someone working in the industry, if you evaluate your role in the machine relative to the machine's output, its probably pretty hard to feel as good about yourself as someone working at SpaceX or whatever.