The emergence of artificial intelligence as a valuable and applicable business tool has begun reshaping the employment landscape across the country. As machine-learning and AI continue to innovate, many industries will begin shedding operational positions in favor of more efficient and cost-effective tech solutions.
Citigroup President James Forese told the Financial Times in 2018 as many as 10,000 “operational positions” at the bank could be wiped out in five years due to AI. The financial services industry is one sector that is poised to lose substantial jobs, along with customer service representatives, compliance agents and loan officers. A year earlier Deutsche Bank CEO John Cryan said AI could drive “a big number” of job losses at the 91,000-employee German bank. With Financial Institutions such as Fidelity, Santander, State Street, Putnam Investments and others making their homes in Boston, the city has one of the highest concentrations of finance jobs in the country. Thus, the impact of decreasing headcounts in the industry will heavily impact the office market.
However, the implementation of AI will create new opportunities at the same time that it is eliminating outdated jobs. New tech positions will need to be filled in order to develop, implement and monitor any AI solutions put in place. For this reason, financial institutions are increasingly valuing technology hubs in their site selection process. With its already substantial financial services industry presence and the world-class tech industry cluster that inevitably spills out of universities like Harvard and MIT, Boston’s status as a prospective home for the finance industry with a technology focus is on the rise.
Given the theorized cost savings and efficiency improvements that an AI-fueled finance business would enjoy, these companies would be a valuable addition to any city’s economy. Over the next 5 years we will see if Boston is able to trade its lost operational jobs for higher-level tech and creative jobs and effectively realize a net gain from this turbulent and disruptive movement. As it stands, Boston appears to have as good of an opportunity to economically benefit from the AI disruption as any other major technology city in the US.
Building owners will need to be proactive in determining how to recruit these technology-focused firms to their properties as the traditional financial institution layouts, cultures, and amenity structures will be obsolete to this disruptive, forward thinking work force of the future.