Junior analysts, beware: Your coveted and cushy entry-level Wall Street jobs may soon be eliminated by AI (2024)

Take entry-level Wall Street banking jobs, for example. Incoming junior analysts could be in danger of losing their jobs to AI, according to a recent New York Times report. Indeed, big firms are reportedly considering pulling back hiring as much as two-thirds as Wall Street relies more on AI, several people familiar with the matter told the New York Times. This includes people working at the most renowned firms, including Goldman Sachs and Morgan Stanley. These companies did not respond to requests for comment from Fortune.

The junior analyst position at big banks is highly coveted, mostly for its pay and for the career path it bestows upon new employees. These workers are typically tasked with researching financial trends, valuations, and economic data to evaluate risk in any new investments. But in practice, the role involves a lot of tedious and repetitive tasks like updating charts in pitch decks and company valuation comparison tables.

Entry-level Wall Street jobs will only get more competitive

Longtime industry workers have already seen AI technologies implemented at their places of work to answer financial, risk, and litigation questions, Michael Ashley Schulman, partner and chief investment officer with financial services firm Running Point Capital Advisors, tells Fortune. Schulman previously served as a vice president at Deutsche Bank, which was named in the New York Times report about AI replacing entry-level Wall Street jobs.

“The easy idea is you just replace juniors with an A.I. tool,” Christoph Rabenseifner, Deutsche Bank’s chief strategy officer for technology, data, and innovation, told the New York Times, although he added that humans will still need to be involved in the decision-making process.

Schulman predicts AI won’t necessarily take all entry-level Wall Street jobs away, but the technology will fundamentally redefine the role.

“In its current state, AI won’t eliminate entry-level Wall Street jobs, but it will reduce the number of heads required to accomplish the same task,” Schulman says. “The entry-level job may transition from being a data gatherer to being a data checker, ensuring the AI didn’t miss anything or digging deeper into nuggets uncovered.”

In turn, future Wall Street workers will “look a little more like computer, statistics, and data science majors,” he says. “Although creativity, business, and economic sense will still matter.” It will take a “keen understanding of what makes businesses tick” in order for these workers to rise to the top of their incoming Wall Street analyst classes, and ultimately climb the ranks.

Redefining entry-level Wall Street jobs

While AI can certainly help streamline routine tasks, including data collection and some surface-level analysis, the technology still doesn’t yet have the same level of judgment as human workers do, Tim Bates, a professor of practice at the University of Michigan’s College of Innovation and Technology who focuses on AI, tells Fortune.

“Instead of replacing jobs, AI is reshaping them, pushing entry-level roles to evolve beyond their traditional contours and emphasizing skills that AI cannot easily replicate,” says Bates, who is the former chief technology officer of Lenovo and General Motors.

Bates says current college students still vying for these coveted entry-level jobs—which can pay up to $126,000 per year, according to Glassdoor—should study the capabilities of AI in undergrad, including data interpretation, strategic decision making, and client management. Still, it’s likely that it will only get more challenging to land one of these Wall Street jobs.

The shift toward AI implementation “is likely to intensify competition, underlining the need for recent graduates to bolster their résumés with specialized skills and perhaps look toward sectors where AI integration is pioneering new roles and opportunities,” Bates says. For current college students vying for a Wall Street position, Bates also recommends looking at jobs in the burgeoning fintech sector as well as consulting and corporate strategy.

To be sure, others believe the effects of AI implementation in the industry could be more short-lived.

“Regardless of how good an AI model is, there is always risk associated with them that the financial industry will have to assess very carefully,” career coach and TED speaker Michelle Enjoli tells Fortune. “I believe that AI will be primarily used in the short term as a resource to assist employees in gathering information, [and] it will take some time for the testing and validation process to be completed in order to determine if it can completely replace an employee.”

For college graduates concerned about the effects of AI on their job prospects, Enjoli recommends staying as up-to-date on the newest developments of the technology as possible.

“AI is another disrupter that is unavoidable that will give employers a reason to reallocate their needs in a different way,” she says. “I recommend that every current and future employee stay on top of AI and how it is affecting their industry so they can prepare accordingly to add value in spite of it.”