It takes two to tango, and as per a report published on The State of AI and Machine Learning suggests, 82% of technical practitioners and 94% line-of-business owners believe that both humans and machines will collaborate in the future, rather than one dominate the other. The concept of such an idealistic future should instill some comfort in those whose jobs are directly threatened by automation i.e. an average of 63% of front office employees across banking, investment, and insurance industries. However, the journey to get there will be messy. With no greater example of this than Deutsche Bank's 18,000 workforce cut, complimented by a $14.5 billion IT budget injection by 2022. As noted in a recent blog entry, Deutsche's move can be viewed as the former of two possible outcomes of automation: "(1) remove $1 billion of cost by slashing your team, or (2) make your team $1 billion more productive". Amazon is undertaking an effort towards the latter outcome by spending $700 million on up-skilling its workers.
This raises an interesting point -- automation does not directly drive the loss of jobs, the priorities of c-suite executives does. In a briefing paper by The Economist on The Advance of Automation, less than half (47%) of all executive respondents strongly agree that automation is most effective when it complements humans, not replaces them. Whilst 57% believe automation will change the skills and requirements the workforce needs. Put simply, there seems to be no true preference between the two outcomes amongst the 500+ surveyed executives. Additionally, only 18% saw automation free up employees to take on higher-level roles, and 17% saw enhanced employee engagement and experience. But, is it too early to truly lean on these statistics?
Lastly, this week saw JP Morgan roll out a new digital investment service i.e. roboadvisor called 'You Invest' via the Chase mobile app. The service will target younger clients with as little as $2,500 to invest across a mix of JPMorgan ETFs, costing 35 basis points per annum. Similarly, an ex-Coutts banker has launched a digital wealth management platform called Rosecut Technologies. Combining artificial intelligence and human advice to provide a bespoke investment solution aimed towards high-net-worth clients. What we are seeing here is more evidence of automation not being the culprit behind looming job cuts. Rather its the B2B consultants promising automation solutions to executives, the pitched cost benefit of replacing workers with algorithms, and the prioritization of lean machine-driven profits, that are the true culprits.