Human financial traders complicit in precipitating the Great Recession may soon find themselves as unemployable as many others, put out of work by robots as if they were factory workers or stevedores. According to a new report by the British Government’s Foresight panel, automated trading by computer algorithms will replace a significant proportion of financial services workers over the next decade.
Huge investment banks and hedge funds already deploy many such algorithms in the battle to profit from lightning-quick trades on tiny movements in stock prices. One such set of computer programs even caused a miniature crash of the Dow Jones last summer. As these robot traders become more and more sophisticated, financial services workers will be forced to trade in their corner offices for the unemployment window.
“Just as real physical robots revolutionized manufacturing engineering , most notably in automobile production, in the latter years of the 20th century, leading to major reductions in the number of employees required at car plants, so the early years of the 21st seem likely to be a period in which a similar revolution (involving software robot traders) occurs in the global financial markets,” the Foresight report said.