Thursday, November 2, 2017 Stamford, CT USA — A surge in demand for experienced banking talent, is making the near-term future very bright for highly talented commercial bankers. Longer-term prospects are dimming, however, due to rapid advancements in business intelligence (BI) and artificial intelligence (AI) capabilities that are already changing the way bankers work and the hiring profiles for new professionals.
Those are among the key conclusions of a new report from Greenwich Associates, The Future of the Banker: Transforming Intellectual Capital Through AI and BI. The report analyzes how changes in technology and the industry are affecting the role of the banker and projects how the profession will evolve in years to come. It also presents a series of ideas on how bank leadership teams can leverage emerging BI and AI technology to increase the effectiveness of their bankers and efficiently deliver value-added advice and insights to clients.
Boom Times for Bankers – Next Three to Five Years
With products becoming more commoditized, banks are looking to woo clients with advice. The resulting surge in demand for experienced bankers is emerging as financial services companies are competing with tech firms for the best and brightest young people—exactly 10 years after the global financial crisis forced many banks to scale back or even eliminate banker training programs.
“Since it generally takes close to a decade for a commercial/corporate banker to develop the expertise and credibility required to efficiently and effectively command the role of a real trusted advisor, banks are struggling to find talent to fill these roles, and they are willing to pay up to get it,” says Don Raftery, Greenwich Associates Managing Director and author of the new report.
AI Clouds on the Horizon
AI platforms will begin to replicate many of the functions now performed by bankers. Most larger banks will be employing some form of BI platform by the middle of next year, and client advice informed by AI algorithms will be common elements of leading banking franchises by 2019.
Eventually, the leading banks’ AI systems will generate high-level, customized recommendations and advice for clients across many lines of business. This will help the banks’ clients optimize efficiencies throughout their finance functions and provide recommendations to help them achieve their goals based on market conditions. More advanced AI-aided advice will help anticipate clients’ needs—even identifying potential M&A targets, partners and optimal capital structures.
As this change plays out, the number of front-office banker jobs will decrease and the portfolios of individual bankers will expand meaningfully as data analytics become far less labor-intensive.
The Future of the Banker
Greenwich Associates believes that bankers/RMs will remain a central part of banks’ value proposition. Banking at its core is a relationship business, yet in the future, the relationship may become driven more by institutions than individual bankers. Even over the long term, highly talented RMs will be required in a wide range of roles. “By providing relationship development, understanding of clients’ specific needs, and an empathetic human face to an essential business partner, bankers will ensure their central role for decades to come,” says Don Raftery.