Goldman Sachs is taking radical action to replace traders with computers in London.
The Wall Street giant is launching its flagship automated trading platform in the UK, a move that is likely to lead to job cuts among its high-powered traders in the country and could revolutionise the way the bank deals with European clients.
Since January, Goldman Sachs has quietly been hiring a team to roll out its high-tech Marquee platform in the UK and has stepped up recruitment in the past few weeks for a European launch. The system is designed to automate more trading functions and reduce the need for human interaction with clients.
Goldman’s decision underlines banks’ desire to harness technology to cut costs, streamline operations and reduce mistakes. It also highlights a growing trend by banks towards replacing traditional well-compensated and high-maintenance traders and bankers with either computers or technology experts.
The move, which has not been reported, will have long-term repercussions for many of the nearly 1,450 employees that work in Goldman’s City securities business in Fleet Street. This amounts to about a quarter of the bank’s wider total headcount in the UK.
One former bank executive involved with Marquee’s development said he expects it will result in a need for fewer people on the trading floor. “If you’re a good sales person, you should want this platform — it leaves you more time to make more money,” he said. “If you’re a bad one, spend a lot of time hiding in admin or are carrying out simple tasks, you should be worried.”
But the bank is also hiring “aggressively” in London and Warsaw for a team to help run the platform, according to a person close to the situation. It is seeking technology staff as well as recruiting for its trading and ‘strats’ functions — a division which houses engineering and quantitative finance experts.
The new London team is being led by managing director John Lynch, who moved into his role at the start of the year. He told Financial News that automation on the trading floor is more about shifting the nature of sales and trading jobs and “allowing our sales and trading desks spend more time working with clients”.
Lynch added the new recruits do not need City expertise. “The financial industry is changing and hiring individuals with broad digital product experience can be hugely beneficial for us,” he said.
Goldman’s shift towards automation has radically changed the make-up of its staff. Globally, it now has more than a quarter of employees – or some 9,000 people – working in technology and strats now makeup 27% of its securities business, up from 19% five years ago.
The bank’s president, David Solomon, told a conference last month that its equities division had shrunk from 500 traders 20 years ago to just three today, each of whom are “going off technology platforms”.
Marquee is a series of apps that allow Goldman’s clients to access its trading systems, data and technology directly, rather than relying on human interaction. Marquee had 7,000 users every month, from 2,000 of Goldman’s clients at the end of 2017 – a 60% uptick year on year.
It is the brainchild of chief financial officer Marty Chavez, who previously headed up technology at the firm, and is a key part of Goldman’s aim to transform itself into the “Google of Wall Street”.
Lynch said Goldman’s Marquee team, which houses hundreds of staff in New York, needed to expand to London in order to ensure that it complies with European regulations and the nuances of local markets.
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