From Clerks to Agentic-AI: How will Technology Change Labor Market in Finance?

TL;DR

This paper examines how technological waves in finance, from computerization to AI, have affected labor productivity by analyzing assets under management per employee across different periods.

Contribution

It documents stylized facts on how each major technological wave has influenced the scale of asset management work without establishing causal relationships.

Findings

Assets under management per employee increased during each technological wave.

Revenue per employee and operating expense intensity also changed over time.

The study provides descriptive insights into labor productivity trends in finance.

Abstract

Financial firms have gone through three major technological waves: computerization in the 1980s and 1990s, the rise of indexing and passive investing in the 2000s and 2010s, and the AI and automation wave from roughly 2015 to the present. This project studies how much labor is required to manage capital across those waves by tracking a simple productivity measure: assets under management per employee. Using a small panel of representative firms, we compare changes in AUM per employee, revenue per employee, and operating expense intensity over time. The goal is not to identify causal effects, but to document stylized facts about how technology changes the scale of asset management work.