Do you ever consider that this is the last era of humanity where human beings will occupy jobs that will soon be taken over by robots and automation? I don’t just mean in manufacturing and construction either. The simple robots that welded and constructed cars in auto plants in the 1980s were just the beginning.
Automation and Job Loss
The imminent advent of artificial intelligence and near sentient computers means that a lot of different kinds of human-occupied employment will soon become obsolete. Do you take for granted how arduous and annoying a visit to the local bank and dealing with a human teller can be? The average bank teller makes about $12 an hour, or between $20,000 and $30,000 annually.
March of the Machines
Well, within the next 25 years, the average human bank teller may be making zero dollars. Over half of all known jobs in the banking and finance industry will be overtaken by A.I. The idea of human beings counting, calculating, and advising you about your finances, investments, and bank savings will be as outdated as a daily visit from the milkman.
According to John Cryan, the former CEO of Deutsche Bank, droves of finance sector jobs will proportionately disappear the more that A.I. and automation are perfected and modified for human-based employment purposes. Moreover, Cryan said such a turnover is inevitable and currently in progress. “In our bank we have people doing work like robots,” said Cryan. “Tomorrow we will have robots behaving like people… It doesn’t matter if we as a bank will participate in these changes or not, it is going to happen,” added Cryan.
It’s Already Happening
Do you have a human financial advisor? (What a way to use phraseology like that in this era of human history, huh?) The average human financial advisor makes about $50,000 to $100,000 a year. Human financial advisors also make about 1% to 2% percentage commission, or more, against the total investment portfolio value of their client.
A robo-advisor is an A.I. enabled computer algorithm that can autonomously oversee and manage bank accounts, investments, pensions accounts, and all other finances like a human advisor. Robo-advisors have been around since the 1980s, primarily as tools for stockbrokers in the stock market. In recent years, the technology has been modified and adapted for widespread consumer use.
Companies like Betterment, Wealthfront, Personal Capital, and SigFig are gaining popularity for offering robo-advisor services. Robo-advisors are available 24/7, manage their autonomous actions based on client preferences, and take 0.25% to 0.50% in commissions. Also, they allow you to manage your money on your own terms without the guidance of a human advisor, some of whom may be giving advice based on sponsor desires or to increase their own commissions. Whether you agree or not with this technological takeover is a moot point. It is already occurring and has been for some time already.
Time Keeps On Slipping Into the Future
A.I. and automated finance workers can work 24/7. They won’t take sick days. They won’t make accounting mistakes. Also, they will help the finance industry more accurately calculate their profit margins better than depending on human employees. Again, whether you feel this is right or wrong is irrelevant. Many industries are moving to automation to replace humans, not just the finance sector.
However, there will be time to ponder this transition as almost half of all finance industry work will be replaced with A.I. and robots. It costs about $50 million for every A.I. replacement algorithm to replicate the actions of a human. The technology is not there yet and is not practical to implement on a wide scale just yet. But in 20 to 30 years, it will be.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.