As artificial intelligence increasingly serves as a key driving force in business strategies across all sectors, this shift is altering the labor market, allowing technology workers to explore opportunities beyond their traditional industry.
The tech job market, while more tempered compared to recent years, remains robust in the financial sector. Major banks are actively pursuing talent, attracting a significant influx of skilled professionals to their ranks.
While tech firms continue to be the primary employers of recent tech graduates, the financial services industry is gaining ground. At Cornell University, the proportion of computer science graduates entering the financial services sector increased from 16% in 2022 to 22% in 2023, the Wall Street Journal reported.
Similarly, Carnegie Mellon University’s Heinz College saw a rise in the percentage of master of information systems management graduates choosing careers in financial services, from 16% between 2018 and 2021 to 19% between 2020 and 2023.
This sustained demand for tech expertise in banking reflects the industry’s ongoing digital transformation, which provides technologists with opportunities to develop patentable innovations.
Generative AI has the potential to create substantial value across the banking sector, including wholesale and retail segments. The fast-emerging technology is projected to contribute an additional $200 billion to $340 billion in value to the industry, according to McKinsey research.
In addition to AI, financial institutions are also investing heavily in areas such as blockchain and cybersecurity, necessitating a continuous pipeline of specialized talent.
Tech Sector Is No Longer Safe
In 2024, the tech industry faced a challenging landscape, with more than 525 companies cutting approximately 150,000 positions, according to Layoffs.fyi. This widespread reduction in headcount is further exacerbated by the growing risk of conventional tech roles becoming outdated or diminished due to the advancement of AI.
The Bay Area, which is the leading tech hub for major corporations and startups, experienced a significant wave of job cuts in its technology sector during the second quarter of this year, due to changing market conditions and economic pressures. Tech companies disclosed intentions to cut over 7,000 positions in the region, as reported by Mercury News. The 7,062 job losses marked the most substantial quarterly reduction since the first quarter of 2023, when the industry eliminated more than 10,000 roles in what was previously thought to be the height of tech layoffs.
The latest national employment data shows limited movement in the tech workforce. According to the November jobs report from the United States Bureau of Labor Statistics, the tech unemployment rate slightly decreased to 2.5%, matching the lowest level recorded in 2024.
However, employment in the tech sector remained largely unchanged, with a marginal decline of 1,636 jobs during the month, an analysis by CompTIA, an organization specializing in IT certification and training, revealed.
In stark contrast, emerging professionals view the financial sector as the most promising career path in the current economic landscape.
A 2024 Global Graduate Outlook Survey by CFA Institute, a not-for-profit organization that provides finance education, found that 30% of respondents identified financial services as the sector they have the most confidence in, marking a six percentage point increase from 2023 and maintaining its top ranking for the second consecutive year.
Banks Are Building Robust Tech Departments
As automation advances, the demand for tech workers skilled in machine learning, natural language processing and large language models is growing. Consequently, employers are placing a greater emphasis on AI skills in their recruitment strategies.
Recent EY research indicated a surge in corporate AI investments, with widespread adoption across surveyed companies, as 95% of senior leaders report ongoing AI investments. Notably, there’s a substantial increase in high-value AI commitments, with the percentage of companies planning to invest $10 million or more in AI expected to nearly double from 16% to 30% in the coming year.
Goldman Sachs projects that global AI investments will approach $200 billion by 2025.
Capital One and Bank of America secured positions among the top 15 companies obtaining AI-related utility patents, joining prominent technology firms such as Toyota, Microsoft, Amazon, Alphabet and IBM, according to patent consulting firm Harrity & Harrity.
Moreover, Citigroup expanded its workforce by adding 8,000 technologists between 2022 and 2023. The bank had previously announced its intention to aggressively hire around 2,500 tech professionals in 2020, including coders, engineers and data analysts, to enhance its trading and investment banking divisions.
Additionally, JPMorgan, Morgan Stanley, Well Fargo, Deutsche Bank and Goldman Sachs are deploying AI and machine learning within its businesses.