Insider Today: Wall Street's new job path

September 25, 2023 • 5 min read

with Dan DeFrancesco

Welcome back! We had some breaking news late Sunday: The Writers Guild of America reached a tentative agreement with Hollywood studios to end a 146-day strike. My colleagues have the latest on that here.

As for today's edition, we're looking at how AI could upend the job of the junior banker, and the effect that’ll have on Wall Street’s traditional career path. 

What’s on deck:

But first, "pls fix."

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The big story

Junior banker adjustment

Plenty of things in finance are complicated, but the way to get a job on Wall Street is not one of them.

Aspiring financiers need to look no further than investment banks’ analyst programs to get a foot in the door. The programs typically last two years and are a crash course in all things finance. 

Spots in analyst programs aren’t easy to come by, often requiring an ultra-competitive internship the summer before. But a stint as an analyst opens the door to plenty of options, from pursuing an MBA, to working in venture capital, or jumping to a hedge fund or private-equity firm.

But this crucial piece of Wall Street’s ecosystem could be upended by the rise of artificial intelligence. Insider’s Bianca Chan and Emmalyse Brownstein spoke to six finance professionals and an entry-level banker to understand how AI would impact younger bankers’ roles. 

The bright side is the tech could automate analysts’ busy work and potentially improve their grueling schedules. But it’s a double-edged sword, as some speculated the tech could lead banks to trim down their analyst classes, creating even fewer opportunities to break into an already cutthroat industry. 

J2r/iStock Photo; Andrii Shyp / Getty Images; Arif Qazi / Insider; Arif Qazi / Insider

These potential changes come when big banks are having a tough go of it while their biggest competitors are thriving. 

Private credit players have filled the void left by banks pulling back on offering risky loans, making them an attractive career path. And private equity has gotten more aggressive in courting junior bankers, starting recruitment when they are only a few weeks on the job. 

If AI enables junior bankers to do more interesting work than managing Excel sheets or updating Powerpoints, that could go a long way to reinvigorating the role. Instead of being viewed as a stepping stone, analysts might be interested in staying at a bank for the long run. 

But if AI leads banks to reduce the size of their analyst classes, it could motivate competitors to tap into the young talent pool banks have long dominated. 

Buy-side firms have largely held off on going after college graduates, instead pointing them toward banks’ analyst programs. But if those diminish in size, it could lead to a feeding frenzy for talent, upending the traditional Wall Street pipeline. 

Regardless of what direction things go, what’s clear is the type of work AI excels at falls directly in junior bankers’ wheelhouse. 

As a result, the two seem destined for a collision course, for better or worse.

3 things in

Markets

🔔 Before the opening bell: US stock futures dip lower Monday, following a week of losses.

Point72; Getty Images; Alyssa Powell/Insider

1. How Steve Cohen’s Point72 trains aspiring portfolio managers. LaunchPoint is the hedge fund’s incubator for analysts hoping to eventually run money for the $30.6 billion firm. The program even includes a pitch session and dinner with Cohen.

2. The Fed’s war against inflation has been a boon for boomers. Many older Americans are sitting pretty, thanks to rising home prices and low-risk investments offering solid returns. More on how the challenges faced by millennials and Gen Z are benefiting boomers.  

3. They were told to “sleep and breathe easier.” Then the job cuts came. As embattled mortgage startup Better prepared to go public last month, its execs assured staff the company was on the right track. But the stock tanked, and two weeks later, the company laid more people off.

3 things in

Tech

sorbetto/Getty Images

1. Well, that’s awkward. Some companies like Meta and Salesforce are looking to rehire people they laid off. For some workers, boomeranging is a complex decision. But similar to a romantic breakup, experts revealed that agreeing to try again will have a lot to do with how things ended.

2. Techies are topping the list of billionaires who saw major wealth increases this year. Elon Musk, Mark Zuckerberg, Jeff Bezos, and other moneybag techies are among the mega-billionaires who experienced wealth surges this year.

3. The 10 popular jobs that AI has some skills to replace. Roles include technicians, cashiers, and medical assistants. ChatGPT could already perform many of the skills needed in these roles with room for improvement down the road.

3 things in

Business

Xavier Lalanne-Tauzia for Insider

1. It’s not just you. LinkedIn has gotten really weird. Remote work has blurred the lines between work and life. Nowhere is it more apparent than on LinkedIn. And it underscores an awkward truth — nobody knows what it means to be professional anymore.

2. The government could shut down within a week. It means many Americans could go without a paycheck. Flights could get delayed. Space research could be impacted. National Parks would be closed. And many other repercussions.

3. The five ways Costco, Lowe’s, Best Buy, and Tractor Supply are winning the battle against retail theft. Big, heavy merchandise means most of their goods are hard to steal easily. And they each also have limited self-checkout options.

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The Insider Today team

Dan DeFrancesco, senior editor and anchor, in New York City. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Lisa Ryan, executive editor, in New York City.

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