Chris Churchman, head of the firm’s Marquee platform, said AI could result in cognitive decline from misuse as the thinking requirements of the industry are assigned to AI tools.
“There’s a huge danger here that in the era of AI, we outsource our reasoning to these models, and we have cognitive atrophy that stops us [from] being able to reason from first principles ourselves,” he said on Goldman Sachs’ Exchanges podcast, as seen by CNBC.
Churchman compared the decline of skills from other modern technology, saying that bankers and financial staffers could lose their analytical skills if AI were responsible for those tasks and decisions.
“Reasoning is still important,” he said.
“You still need to reason about [problems] and structure it into an argument, and now we’re delegating reasoning.”
The main concern is that while the technology may be key in delivering immediate or short-term future profits, it’s likely to harm the industry in the long run, such as drying up the source of future Wall Street top-shot talents.
In fact, junior bankers could end up a thing of the past, with Wall Street firms already looking at ways that AI could be used to lower the ratio of junior bankers to senior staff.
“We can absolutely automate that,” said Churchman, “but then do we get the senior traders that fully understand?”
Churchman said that for AI in the industry to be viable and not harm long-term prospects, banks and institutions need to balance AI use with the current culture of bringing up young bankers through the ranks.
“You learn by doing, and a lot of knowledge is tacit, it was never written down,” he said, adding that Goldman Sachs needs “to make sure we don’t lose that tacit and intuitive knowledge that some of our best people have today [and] to ensure the next generation have it too,” Churchman said.
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