RIP the trader. Arise, the ‘data facilitator’

The financial traders of the world are being replaced by constructs of software and networking cables.
10 July 2018 | 652 Shares

Modern financial institutions don’t need traders, they need data and tech talent. Source: Shutterstock

Readers of a certain age will remember the arrival of the young, upwardly mobile, over-paid financial trader in the 1980s.

Epitomized in the Michael Douglas movie “Wall Street,” and as played by Leo DiCaprio in “The Wolf of Wall Street,” these traders were a love-hate figure, admired by the aspiring types, loathed by socialists.

But in the last few years, the movers and shakers of the financial services industry have moved away from talk of excess, to discussing code, cloud, networks, and APIs, and possessing a decent dollop of financial insight.

The front office jobs at investment banks are being filled by machines; algorithms which read the markets, learn and make decisions in microseconds to buy, sell, hold ’em or fold ’em.

Stock exchange floors the world over are still populated by young men waving and shouting the odds (literally), but there’s a note of desperation in their voices: their days are numbered, and they know it.

The trend began nearly 10 years ago, epitomized by Goldman Sachs reducing its trader numbers, piece by piece. From 600 traders in 2000, it now employs just a handful – albeit supported by dozens of data engineers.

Machines, robots, software constructs – call them what you will – never sleep, never tire, never ask for a pay rise and blithely make money around the clock.

As one financial center closes, another’s opening bell rings – the software doesn’t care, and doesn’t even crave a pick-me-up latté.

To make a mint today in the financial district, you need two things: to know the markets (of course; some things never change) and know tech.

Even if you don’t write trading algorithms, knowing who can, how to leverage tech, and how best to deploy it: these are the new skills in huge demand in the financial districts of the world.

Finding unique opportunities in a world interconnected by APIs, database schema, and fiber cabling is the new way to make yourself a small fortune, and all without the traditional burn-out by age 32, the fate “suffered” by the retiring traders of the previous generation.

According to Citibank alumni Huy Nguyen Trieu for a piece in The Data Incubator:

“If you’re a flow trader, you will know that a lot of what happens on the trading floor has already been automated. You will also see that a lot more can be automated in the future. If you want to keep your job, you need to question both what your role will be in this automated future, and what impact artificial intelligence will have on your area of the business.”

The answer is to become what Nguyen Trieu terms a “data facilitator.”

Effectively, instead of working at the financial coalface, the new generation needs to be able to deploy the silicon machinery to enable automated, digitized coal extraction.

There are Lamborghinis out there waiting to be ordered, and red suspenders and a Paul Smith shirt are not required.

De rigeur for the next few years will be a faded Iron Maiden T-shirt and an unfortunate manner around fellow humans. And lo, the geeks will inherit the Earth.