Goldman's brave new world for bankers raises a few big questions
Goldman Sachs' senior investment bankers could soon have something new to contend with. Not only will they have to cross-sell the firm's hedging products when they meet clients, they may also have to take a gaggle of the bank's analysts and associates along with them.
So suggests Richard Rivero, head of the 75-person team of Goldman Sachs engineers working on the automation of the firm's investment banking division. In the bold new automated world, Rivero says Goldman's juniors won't have to engage in "mundane" and "rote" tasks. They'll be free! "Instead of working all day [and night] on pitch books, our junior bankers can get out on the road, meet with companies and spend more time being students of the markets," says Rivero, articulating his bold new vision for the life of banking juniors once his team has set to work.
While this is great in theory, it's not clear how Rivero's new world will work in practice. If junior bankers are out on the road, what about mid-level bankers? What about the senior associates? Junior VPs? Is a managing director (MD) who's out meeting clients supposed to take the entire team with her so that everyone can "get out on the road" while the machines stay in the office? Somehow, we suspect that this would cramp most MDs' style. Part of the joy of being a client facing banker is the absences from the desk and the escape from juniors. The head of HR at another investment bank tells us one of her issues is getting senior relationship bankers to fraternize with eager analysts. At Goldman Sachs, the danger seems to be that analysts are about to be appended to MDs at all times.
Even assuming MDs are ok with this, it's not clear what the junior bankers would bring to client meetings. Rivero says his team is building new apps using machine learning that will allow clients to better understand shareholders, analyze debt capital structures, visualize data, and make statistical inferences. Will juniors simply become experts in using these apps? Will MDs open the door to client meetings and will juniors press the relevant button on the screen? Will it be the role of the VP to explain what the app's saying?
We don't know and Rivero doesn't say. There is alternative interpretation to his vision though, and this is that analysts, associates and VPs will go off travelling on their own to meet clients, unaccompanied by the firm's MDs. This might be what Rivero means when he says prefaces his the claim that juniors will be getting out and about by saying that the new "digital tools," will allow Goldman bankers to, "cover more clients... in more regions." Under this version of the new reality, Goldman's MDs could find themselves superseded by juniors and mid-rankers armed with iPads.
Either way, the implication is that junior bankers are about to cede lives of 14-hour days in the office for lives of perpetual traveling. After the fifth flight in four days, associates might come recall long nights in the office with something resembling nostalgia.