How new grads should be approaching AI as they seek careers in finance

School’s out, grads are looking for jobs, and there aren’t many to be had. So, why are young job-seekers optimistic about their prospects in finance?

According to the CFA Institute’s global graduate outlook survey, 40 per cent of Canadian university students and recent grads ranked finance as the sector in which they have the most confidence, beating the next closest sector – STEM (science, technology, engineering, and mathematics) – by 20 percentage points. What gives?

Michael Thom, managing director of CFA Societies Canada, says the financial sector may offer better prospects for young professionals with artificial intelligence skills they’re ready to use in the workplace.

Most students (87 per cent) surveyed expressed confidence in their AI literacy, and 35 per cent believed their AI skills would boost their job prospects more than traditional skills, such as speaking another language, at 23 per cent.

Still, almost three-quarters feared AI could hurt their careers and make it harder to get a job.

We spoke with Mr. Thom about the survey and what’s most important for those entering careers in finance.

New grads like the financial industry right now. How come?

I wish I had [more] explanatory variables.

If you look at some of the questions around secular challenges, there’s a pathway in which finance is enabled by AI and able to adapt to the challenge of AI, and it’s not entirely disrupted and made obsolete.

Unfortunately, it’s a dire market for new grads, and AI may be contributing with entry-level jobs being eliminated. How should grads be looking at that in terms of financial jobs in Canada?

The younger cohort is definitely affected inordinately by the employment weakness we’re seeing in the broader Canadian economy right now, and that’s a point of concern. I’d want to look at what the data points are on financial services on a sectoral basis, but it’s in the data that new grads are positive, and I think financial services is going to be relatively resilient in this cycle. And that’s cause for optimism.

What new skills should people entering finance be acquiring or developing?

That’s been a big topic of conversation. AI literacy is something that probably a certain number of the new grad cohort take for granted, but it’s really important to turn whatever implicit literacy you have into applicable skills in the workplace. So, arming yourself with understanding AI, and generative AI in particular, [as well as] broader trends around data usage and data wrangling … and synthesizing that into parts of your job.

There’s reason to think about AI as an enabler rather than a replacer, at least at this stage.

What are some of the ways entry-level jobs in the financial sector are changing as AI is adopted?

Some of the pieces of relatively low value-add work around rote commentary and content production – tasks junior staff would have cut their teeth on just as a learning exercise. That’s compressing, to some degree, where there are pieces in that value chain that generative AI is quite competent at if prompted properly, fed the right information properly, and constrained from a hallucination perspective properly. And then it allows you to scale the outputs really interestingly.

UBS has deployed AI personas of some of their analysts to answer questions on the basis of their published research, allowing them to stretch further from both an internal and an external client resourcing perspective. That’s really interesting as a not-so-remote application.

That’s enablement as opposed to replacement, and allowing highly trained investment professionals at various levels of their career development to be in more places at once, which is exciting.

In terms of replacement, is there any risk that if firms aren’t needing to hire as many entry-level positions – whether it’s analysts or advisor assistants – that you lose out on the talent chain and it’s tougher to have that pipeline, especially on the advisor side, as the industry ages?

It’s a risk, but you really have to look at this on a sector-relative basis. AI allows new hires to get to more value-added work more quickly, and take away some of those low value-added tasks.

So, from a progress perspective, there’s more progress expected more quickly from staff to provide value around tasks that AI can’t do reliably, better and more quickly.

Again, that’s exciting from a career development perspective. Does it have net negative effects on the number of people you need to hire? Maybe, but I’m not convinced by anything I’ve seen yet that it’s affecting finance more than elsewhere. If anything, it might be the inverse.

Is there anything else you want to say on this?

There’s still this view in some quarters that this is a hype cycle: ‘I don’t believe this is real yet, and I don’t think this justifies changing my skill set and how I do my job.’ And that might be ill-founded. AI does deserve everyone’s attention. Whether you’re late career, mid career, or early career, you’re probably going to want to approach it in different ways, but it’s worth everyone’s attention.

– This interview has been edited and condensed.

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