Investment banks accelerate their efforts to automate primary “heavy work”


Investment Bank Update

Wall Street Bank is stepping up efforts to automate the “heavy work” imposed on young investment bankers, describing the changes as an attempt to reduce workload and prevent young talent from leaving the industry.

According to bank executives, companies including Goldman Sachs, Barclays and Moelis are taking steps to automate basic functions, such as generating brochures and valuation models.

These efforts show that Wall Street Bank’s attempts to appease junior bankers by raising salaries are not enough to prevent the high turnover rate in its ranks.

Dan Dees, co-head of investment banking at Goldman Sachs, said: “The purpose of this is to allow young bankers to do more and more meaningful things and less and less trivial things.”

The so-called heavy work may include browsing news stories to prepare a public information booklet (PIB) about potential customers, cleaning up data sources for company financial indicators, and formatting PowerPoint presentations.

Goldman Sachs has nearly 100 automation and efficiency projects underway in its investment bank. It has also developed tools that can automatically update the charts in the presentation with the latest data, so bankers don’t have to edit them manually.

Barclays formed a working group that includes co-heads of its investment banking operations to find ways to automate some of the tasks performed by junior bankers.

Barclays Investment Banking Co-Head John Miller said: “We are investing to automate the role of junior bankers in an effort to improve efficiency and enhance their work experience.”

Moelis said the bank is reviewing how to improve its process of generating brochures, which will be shown to potential customers.

This automation can also help companies reduce the number of bankers they need to hire in the future, especially if they must pay higher salaries.

“With the help of technology, the number of employees in the banking industry may be reduced. The motto has always been, still is, and will only increase: do more with less money,” a banking analyst at Wells Fargo Bank Mike Mayo said.

Investment banking workflows are dominated by transaction activities, so in busy years such as 2020 and 2021, companies often find themselves understaffed.

The typical stress becomes particularly severe during the pandemic, and employees have to deal with record-breaking stress Trading activity When working remotely.Earlier this year, a group of first-year Goldman Sachs employees talked about The effect of exhaustion time About their mental health.

David Erickson, a lecturer in finance at the Wharton School of Business at the University of Pennsylvania, who worked in investment banking for 25 years, said: “Since the pandemic, the speed has changed forever.” “Instead of eight. To ten [presentations] For the team in a week, there are now 8 to 10 presentations per day. “

Erickson said that even before the pandemic, the investment banking industry had lost some of its brilliance for graduates. He saw fewer and fewer students choose to enter the industry, instead choosing private equity, technology, and consulting. .

The most notable move in the battle for talent is the Bank of Wall Street Increasing salaries for junior bankers, The rough benchmark for first-year salary increased from US$80,000 to US$100,000. This does not include bonuses.

The bank said that automation work shows that more funding is not enough to ensure that the industry can still attract top talent.

“This has nothing to do with people working less hours. It’s about people working on things they value,” said Hugh Richards, global head of the JPMorgan Digital Investment Bank, which established the program in 2018.

Investment banks lag behind other parts of the bank in terms of technology adoption, such as sales and transactions, and many other functions remain unchanged from decades ago.

“Data preparation and data aggregation are 60% to 65% of young bankers’ jobs. The time for automation is ripe,” said Roy Choudhury, managing director of the Boston Consulting Group.

One obstacle is that senior bankers sometimes discourage junior bankers from using existing tools. Bankers say that part of the reason is the apprenticeship method boasted by investment banks, and spending a lot of time on small tasks is seen as a rite of passage. Peter Pollini, Head of Banking and Capital Markets at PricewaterhouseCoopers, said that for others, “trust in data is a huge leap.”

However, eliminating the secular is still only part of the battle. David Stowell, a professor of finance at Northwestern University’s Kellogg School of Management, said the guidance of senior bankers is most likely to ensure that younger generations feel that their work is worthwhile.

“Some bankers just don’t spend time with juniors,” said Stoverville, who once worked in investment banking. “Some people only spend time with junior bankers when they make mistakes. Then these young people feel they are treated like machines.”


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