The harsh reality of tech in finance: UBS calls coding an outdated skill
Software developers in financial services are fearful of AI taking over their jobs and it's more than mere paranoia. In a blog post this week, UBS's chief economist Paul Donovan wrote "much of computer coding already has the look of a stranded asset," something that "loses its value earlier than expected."
Code and coding are less valuable than they used to be. As banks cut costs, decommissioning legacy applications is all the rage. UBS said today that it's on track to cut 3,800 applications between 2023 and 2026. Banks are streamlining tech and focusing on automation; fewer developers will be required overall.
It's not just coding itself that Donovan has doubts about. He calls all STEM skills "vulnerable," and notes that they become "obsolete more quickly than other skills." That's bad news for quants too...
Fortunately, not all recruiters agree. Peter Wagner, managing director of boutique recruitment firm Affinity North, says that fundamental aspects of STEM, such as problem-solving and critical thinking, "will only be more in demand as the complexity of our technological world increases.
As for software development, Wagner says it's less about coding as we know it and more about "the process of using building blocks to piece together larger applications." AI makes things easier, but "someone still needs to visualize the required building blocks and how to fit them together.
Wagner notes that something similar happened as programming languages simplified and became more easily able to deal with low-level code details themselves. While there are multiple layers to the process in which software is executed, "layering doesn’t mean the hard work is done, and we no longer need outstanding developers," he says. Even now, elite low-level coders have only had their stock rise through the evolution of high frequency trading.
Wagner says the "complexity migrates up the stack" and that may eventually mean prompt engineering takes center stage over traditional coding. "The same/similar skills are needed to solve the new challenges," he says. Perhaps it's a sign not to put all your chips into memorizing Leetcode puzzles.
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