Over the past few weeks, I've been testing ChatGPT’s most powerful reasoning tool to date, the o3 model, and challenged it with one of Wall Street's fundamental valuation techniques: the Discounted Cash Flow (DCF) analysis.
Super interesting, thanks for this! Now I’m curious to know where each of the major Wall Street banks are at in terms of embracing financial modeling products and/or having formal training sessions on prompting etc as you mentioned!
Thanks for reading! I’ve been regularly checking in with my network of friends and contacts at large banks and private equity firms but unfortunately there hasnt been much progress on either front. I think it will take time, right leadership, and continued advancements in AI technology for meaningful integration to happen
“To do that well, we need to double down on inherently human skills: nuanced judgment, deep understanding of domain-specific complexities, and interpersonal communication.”
And on a different note, the point you raised about juniors applies far beyond finance. Back in December, I spoke with the country manager of a large company, and he shared a similar dilemma: he wants to invest in young people (he even mentors and finances projects in his free time), but hiring them means spending money, and even more money to train them. Meanwhile, tools are faster and cheaper, and some of his competitors have already paused junior hiring and plugged AI into the gaps. He’s worried that if he doesn’t do the same, he’ll fall behind.
So the question still stands, and it’s a big one - how do we keep integrating young talent into the workforce in a world where AI tools can already do the job?
Thanks a lot for the comment Daria! Thats a great question and i think the answer to that will continue to change over time as we see 1) further progress on AI tech advancement (ie capabilities expansion and finesse) and 2) system-level integration of AI in corporate settings. I think a lot of ai tools and services currently available does a ‘good enough’ job when integrated appropriately into workflows. But the ‘good enough’ outputs themselves are actually whats preventing these tools from really being implemented and utilized systematically by firms and its employees. People dont want to go through the hassle of learning new tech/way to do things just to be able to use ‘good enough’ ai tools. They want ‘excellent’ tools that can truly be leveraged without the need to constantly fact check or significantly modify its outputs. Do i believe that AI advancements will eventually get to a point where thats possible? Absolutely. And when we do, the answer to your question will probably look a lot different than it does now.
But in the mean time, the current state of play isnt reflective of that kind of ai capability yet and thus, human input, oversight, and feedback remains crucial. What that means is if a company is testing out ai tools, they will still need humans to oversee the process and outputs. What younger generation of talent need to do is focus on developing as much AI knowledge and proficiency as they can to truly stand out as AI experts and use that as an edge to distinguish themselves in hiring scenes. AI tech will continue to develop and associated capabilities will change very quickly - understanding these changes real time and bringing new perspective using technical proficiencies will be the value that junior talents bring to firms. Essentially, i believe that legacy companies will need the help of younger, more technologically savvy talent to stay relevant and competitive.
Lastly, as technology develops, the way we do things will change as well. And while change can very well mean enhanced efficiencies leading to smaller headcount for existing positions, change can also mean creation of new opportunities, positions, and job titles that currently dont exist - because we dont realize we need it yet! Perhaps these will be the areas where younger talent undeniably will have the edge and will incentivize companies to continue to bring in junior employees to train, work, and partner with them.
Hopefully thats helpful. My answer is one perspective and definitely not the playbook, but thats what i think for now!
Great article and insights! Even without a financial background, I could not agree more with the part where you discuss juniors' roles and responsibilities. I definitely believe this can happen in other industries too — including FMCG, where I work.
Just a minor suggestion and food for thought — it would be great if you could also have a chance to write about current juniors on Wall Street; where they are now and where they think they'll be, based on your thoughts!
Super interesting, thanks for this! Now I’m curious to know where each of the major Wall Street banks are at in terms of embracing financial modeling products and/or having formal training sessions on prompting etc as you mentioned!
Thanks for reading! I’ve been regularly checking in with my network of friends and contacts at large banks and private equity firms but unfortunately there hasnt been much progress on either front. I think it will take time, right leadership, and continued advancements in AI technology for meaningful integration to happen
Such a great piece.
Couldn’t agree more on this:
“To do that well, we need to double down on inherently human skills: nuanced judgment, deep understanding of domain-specific complexities, and interpersonal communication.”
And on a different note, the point you raised about juniors applies far beyond finance. Back in December, I spoke with the country manager of a large company, and he shared a similar dilemma: he wants to invest in young people (he even mentors and finances projects in his free time), but hiring them means spending money, and even more money to train them. Meanwhile, tools are faster and cheaper, and some of his competitors have already paused junior hiring and plugged AI into the gaps. He’s worried that if he doesn’t do the same, he’ll fall behind.
So the question still stands, and it’s a big one - how do we keep integrating young talent into the workforce in a world where AI tools can already do the job?
Thanks a lot for the comment Daria! Thats a great question and i think the answer to that will continue to change over time as we see 1) further progress on AI tech advancement (ie capabilities expansion and finesse) and 2) system-level integration of AI in corporate settings. I think a lot of ai tools and services currently available does a ‘good enough’ job when integrated appropriately into workflows. But the ‘good enough’ outputs themselves are actually whats preventing these tools from really being implemented and utilized systematically by firms and its employees. People dont want to go through the hassle of learning new tech/way to do things just to be able to use ‘good enough’ ai tools. They want ‘excellent’ tools that can truly be leveraged without the need to constantly fact check or significantly modify its outputs. Do i believe that AI advancements will eventually get to a point where thats possible? Absolutely. And when we do, the answer to your question will probably look a lot different than it does now.
But in the mean time, the current state of play isnt reflective of that kind of ai capability yet and thus, human input, oversight, and feedback remains crucial. What that means is if a company is testing out ai tools, they will still need humans to oversee the process and outputs. What younger generation of talent need to do is focus on developing as much AI knowledge and proficiency as they can to truly stand out as AI experts and use that as an edge to distinguish themselves in hiring scenes. AI tech will continue to develop and associated capabilities will change very quickly - understanding these changes real time and bringing new perspective using technical proficiencies will be the value that junior talents bring to firms. Essentially, i believe that legacy companies will need the help of younger, more technologically savvy talent to stay relevant and competitive.
Lastly, as technology develops, the way we do things will change as well. And while change can very well mean enhanced efficiencies leading to smaller headcount for existing positions, change can also mean creation of new opportunities, positions, and job titles that currently dont exist - because we dont realize we need it yet! Perhaps these will be the areas where younger talent undeniably will have the edge and will incentivize companies to continue to bring in junior employees to train, work, and partner with them.
Hopefully thats helpful. My answer is one perspective and definitely not the playbook, but thats what i think for now!
I wish I had this during my finance final in b school lol
Haha would have been a game changer. Modeling tests are going to look very different soon!
Great article and insights! Even without a financial background, I could not agree more with the part where you discuss juniors' roles and responsibilities. I definitely believe this can happen in other industries too — including FMCG, where I work.
Just a minor suggestion and food for thought — it would be great if you could also have a chance to write about current juniors on Wall Street; where they are now and where they think they'll be, based on your thoughts!