Automation on Wall Street Is Coming Sooner Than You Think

Wall Street firms are pushing to develop software that can suggest trades and structure complex hedges, long the domain of stock pickers and derivatives sales staff. Firms are also experimenting with automated analysis of legal documents. Some investors and executives have been predicting major job losses once people are replaced. Bloomberg’s Saijel Kishan, Hugh Son and Mira Rojanasakul mapped out exactly which jobs are vulnerable to being replaced by computers—and when. The good news for humans: Robots haven’t been as quick to figure out markets where trading is sometimes opaque or volume is low, such as credit trading. More liquid markets, such as equities and currencies, are easier to master.

There once was a time when risk managers’ phones would ring off the hook at the faintest whiff of trouble. But something’s changed. Donald Trump could tap out a tweetstorm, a North Korean missile could fly over Japan, or there could even be a terrorist attack—but now there’s barely a phone call. “That’s absolutely crazy,” said Mark Connors, Credit Suisse’s global head of risk advisory. What’s changed? Investors are now embracing their speculative side, write Bloomberg’s Dani Burger, Elena Popina and Lu Wang. Some say this is normal behavior during the late stages of a long-lasting bull market. Investors are worried that they’ll miss out on money if they don’t lean in: They are “buying the dip.”