After AI Takes Millions Of Finance Jobs, These Cities Are Poised To Get Them Back

Artificial intelligence is expected to upend the global labor market and make corporate site selection a highly data-driven process, but commercial real estate doesn’t think AI’s economic revolution is necessarily a negative for the U.S. workforce.

Banking and finance jobs remain popular today, but AI stands to wipe out or reassign 1.3 million jobs in the sector by 2030, according to London-based ISH Markit. A 2017 McKinsey report estimated as much as a third of global work activities could be displaced by AI in the same time frame, depending on the country. 

“Ten years ago, the subject of AI was taboo in the economic world,” said national site selection expert and The Boyd Co. principal John Boyd. “Now, trying to stop AI is like standing on the beach and trying to stop the tide from rolling in.”

Commercial real estate may be slow to adopt technology in the workplace, but tech takeovers in other industries are influencing space decisions.

AI is emerging as a leading site-selection driver, especially in the banking and financial service sectors, according to a report released earlier this month by Boyd’s firm. Customer service representative, financial manager, compliance agent and loan officer positions are expected to be most impacted by AI, and Boyd client JPMorgan Chase is preparing thousands of databases to accommodate machine learning, according to the report. 

Citigroup President James Forese told the Financial Times in 2018 as many as 10,000 “operational positions” at the bank could be wiped out in five years due to AI. A year earlier, Deutsche Bank CEO John Cryan said AI could drive “a big number” of job losses at the 91,000-employee German bank.

But while AI promises to eliminate jobs and save the banking industry up to $1 trillion by 2030, it also stands to create plenty of new jobs and demand new tech talent pipelines feed into industries. Forward-thinking cities that invest in AI-related programs stand to benefit the most. 

Montreal tops a list of 25 cities Boyd selected as leading markets for site selection where artificial intelligence is a leading driver. The Canadian city’s open immigration policies, deep talent pool for financial service workers and a favorable exchange rate contributed to its top spot in the ranking. The Canadian government has also earmarked $950M to make the Quebecois city an artificial intelligence “supercluster.”

Montreal has already gained jobs from New York-based Morgan Stanley and Boston-based State Street, as well as Facebook, Google and DeepMind.

“Clients are asking about it more than ever,” Boyd said. “We’ve noticed banking companies gravitating toward tech clusters.”

Tech clusters are increasingly tied to markets with a sizable university presence. Montreal has McGill University and the University of Montreal, Boston has Harvard and MIT and the Bay Area has Stanford. But the Boyd report gives high marks to markets beyond some of North America’s leading technology centers. 

Salt Lake City, ranked second overall and the highest-ranked U.S. city, is home to the University of Utah’s School of Computing, one of the leading AI programs in the country. The western U.S. city is home to several banking operations centers for companies like Discover Card, American Express, Goldman Sachs, JPMorgan Chase and Fidelity. 

Rounding out the top five are Wilmington, Delaware (close to the University of Pennsylvania), Jacksonville, Florida (University of North Florida), and Omaha, Nebraska (University of Nebraska). 

But real estate experts still think companies utilizing AI in site selection will migrate to markets with universities with more international appeal like New York, Boston and San Francisco even though they placed lower (11th, 13th and 20th, respectively) on the Boyd ranking. 

“If you think about where innovation is taking place, it’s largely in these markets where there are these world-class institutions who then partner with the marketplace to enable business expansion,” JLL Head of New England Research Julia Georgules said. 

MIT announced in October plans for a $1B college for AI, machine learning and data science. Stanford’s AI push also comes with a concentration of deep-pocketed venture capital funds on Sand Hill Road, a Silicon Valley corridor known for providing early funding for numerous tech firms in the area. 

But smaller markets can also utilize AI to stand out. With AI comes better data that will enable companies to quickly find the market best-suited for their talent needs and other wants, be it quality of life or lower cost of living.

“This idea you can start a company town anywhere and people will come find you isn’t true anymore,” Georgules said. 

Preventing The A.I. Swan Song For Jobs

While he recognizes AI has the potential to eliminate millions of jobs, Atlanta-based Transwestern Executive Managing Director Clark Dean also sees the potential for it to create a network of new jobs in tech clusters across the country appealing to the different sectors within AI. In the meantime, he already sees how it has created value to clients in the site selection process.

Dean’s team utilizes tools today he says weren’t available three years ago, including the ability to identify existing talent bases in the U.S., recommend how to curate a corporate ecosystem around a site and identify what people have a higher likelihood of performing better in a role.

“It’s all about reducing uncertainty, helping people understand and quantify risks and make better decisions,” he said. 

Dean doesn’t deny that, while a boon to site selection efficiency, AI still has the potential to drastically alter the U.S. labor market. But he and others interviewed for this story said it is important for all schools — not just the ones in Boston and Palo Alto — to recalibrate curriculum to meet the labor needs of the coming decades. 

AI is trained, not programmed, which means many of the workers whose jobs are in jeopardy will have to educate the new system, said L.D. Salamson, co-founder of real estate data firm Cherre. 

Given the sensitive nature of what some of the AI programs will be handling, Salamson thinks there will still be a need to keep many of those employees around to oversee operations. Vast corporate AI networks also means there is a potential for job growth over wipeout. 

“Every time we talk about AI, there’s the doom-and-gloom narrative,” Salamson said. “But the flip side is it’s going to create a tremendous amount of jobs. Labeling, training and tagging data is a massive operation.”