Wall Street’s young bankers voice their biggest concern

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Silicon Valley has been
encroaching on Wall Street’s turf.

Margin Call screenshot

Business Insider recently compiled a list of
the top talent on Wall Street
age 35 and under, interviewing

dozens of bankers
, asset managers, and traders in the
process.

We asked the crop of dealmaker candidates making waves in
investment banks and private-equity shops the same question:
What’s your biggest concern about the industry?

While responses varied — some bemoaned market trends, like
record-low volatility and sky-high valuations — a strong current
ran through the vast majority of answers that underscores Wall
Street’s challenge
in keeping up with Silicon Valley
.

Most notably, bankers are concerned with Wall Street’s ability to
recruit and retain young talent given the competition from tech
giants and startups that offer juicy perks, a more relaxed
lifestyle, and an exciting, entrepreneurial environment.

There’s a reason Goldman
Sachs is rebranding itself
as a tech company and trying to
hire engineers in droves.

The industry has changed swiftly since the financial crisis, and
the stable, predictable career trajectory calcified over decades
on Wall Street has
largely been thrown out the window
.

“When I joined the industry 10 years ago, if you were smart and
had an interest in business, chances are you were coming into
finance and consulting,” one private-equity standout told us. “We
were able to get the best and brightest undergrads. With the
advent of startups and tech — Google, Snapchat, or entrepreneurs
— we’re finding it more difficult to recruit that top tier.”

A handful noted that banks, despite marked improvements in recent
years, still struggled to offer a healthy work-life balance. Many
of the people we spoke with in their early 30s had recently
become parents, mixing that daunting responsibility into the
cocktail of one of the most competitive, high-pressure career
tracks out there.

Here’s what a couple of others had to say:

  • “There’s been a shift in terms of talent and rigor — it’s
    hard to get people who are super, super committed,” a banker told
    us. “Work-life balance is very tough. People glamorize tech
    startup life.”
  • “There’s kind of a lost generation from 2007 to now … for a
    lot of reasons they don’t want to work in banks,” another banker
    told us. “This 10-year gap of people that should be in banking
    that instead chose to go to venture or startup or charity.”

And in the same vein, young financiers are concerned that the
technologies coming out of Silicon Valley may further drain the
pool of opportunities.

“There’s a lot of fear about how much technology can replace
day-to-day tasks,” one banker told us.

Former Citigroup CEO Vikram Pandit said
last month
that 30% of banking jobs could be gone within five
years from the threat of automation and artificial intelligence,
though relationship-based practices like investment banking face
less risk than trading operations.

“I do think we need to be better coordinated about how Wall
Street will protect itself against outsiders who are going to be
encroaching on the banks’ turf,” another rising banker told us,
highlighting Apple Pay, PayPal, and blockchain as emerging
threats.

Banks may continue to struggle to lure talent back from Silicon
Valley, but they’re awake to technology threats.

Investments in private tech companies by banks
have soared in recent years
. Goldman Sachs is leading the
charge, but Citigroup, JPMorgan Chase, and Morgan Stanley are all
very much in the game as well.

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