The fact that finance is ripe for (and now rife with) technological disruption is one factor pushing the bankers in that direction, but the primary one since 2008 has been this: it's the gold rush of the decade.<p>A certain portion of the population, including most of the type-As, consistently pursue whatever opportunities promise the most money and prestige in the shortest time for the least work. Until the financial crisis, the best path to that end was getting rich as a trader. Now, startups offer greater risk but even faster and more tantalizing rewards. The exodus of finance towards tech will continue exactly until the next investment winter, at which point it will likely turn into a flight from SV-style tech into yet another sector - my best guess is health and bioinformatics.
"He and three partners “went into a zero-salary moment” setting up Algomi Ltd., a bond sales management platform to be used by traders, portfolio managers and investors. Three years later, the 42-year-old says the far longer hours to bring home a fraction of his previous pay are worth it. “I enjoy what I’m doing, we’re creating something I think is making a difference, and it’s mine.” "<p>It doesn't seem like he really left finance at all - in fact, it looks like he probably hired some coders and had them build a product that he oversaw, then sold it utilizing his experience and connections inside the financial industry.<p>Are you really leaving finance for a tech job if all of your clients are in finance?<p>Also, did he really risk his life savings on this? Seven figures for even just a few years would set you up to launch a company and still retain some life savings, it seems like.
Two thoughts on this:<p>1. From the headline, I was expecting this story to be about investment bankers walking away from ~$300K total comp jobs to join early stage startups that pay $85K salary plus equity. In fact, it's basically about finance people doing what finance people have done for years -- realize that they could make a bunch more money if they start their own firm. I am not sure that the fact that the new firms they are starting are using technology in order to disrupt longstanding paradigms is especially new or newsworthy.<p>2. I do think that the development of AI has some interesting implications for the business of investment banking. Specifically, I think that we are at or close to a point where software solutions that do the blocking-and-tackling tasks performed by a young analyst -- spreading comps, making profile pages for all the dominant players in an industry, etc -- will make analysts unnecessary. If I had to guess I'd say that in 10 years, the only reason there will be analyst programs on Wall Street will be to teach bankers the theory behind what is done in an instant by AI -- in the same way that student pilots learn to navigate manually even though there's GPS.
I had to fight to get to the bottom of the article which felt like a 'I know a few guys who...' article being used to define a trend.<p>All in all it felt like another 'someone who makes more than you took a risk' being written because the risk can be turned into a marketing campaign for their start up.<p>In the end it felt very light.
The first thing you should know is that investment banks trap graduates in some of the most boring jobs in the world. Spreadsheet jockeys and Power Point monkeys. If you're smart, you last two years as an analyst and jump to an MBA program where you will learn nothing but earn the right to be rehired one rung up by another bank as an associate. If you can avoid the axe, and navigate the politics, by working 14-16 hour days for several years you will finally be in a position to boss a lot of people around for an institution that serves no social purpose. So yeah, the bankers are jumping.
500,000 jobs in Software Development and Cybersecurity and 250,000 unemployed bankers who are all keen to work in technology? That sounds like nightmare material to me.
Finance doesn't have the same allure to many as it used to have. It's partially due to salaries being overshadowed by stories of start-up founders but also the increased regulation and stifling of financial innovation. Whatever you think about the benefits of new financial products, being on the cutting edge of a new product like subprime mortgages or collateralized debt structures would be exciting to some and attract a lot of A-players. The profit potential was also there as groups getting in on the ground floor of these products would be able to charge a large premium for creating such products and specialize early on. That and financial transparency are reducing the ability to leverage very specialized product/market knowledge to make a large personal return (not to mention the threat of lawsuits).<p>Although the salaries are still high, I don't think most people working in finance really believe they will become millionaires staying in the conventional banking route. The idea held by many is that tech start-ups offer more upside.
My experience is that most of the finance majors start in engineering. And switch majors to finance once they get to the engineering weeding out classes.
Another funny thing about the disappearance of all these finance jobs, is I'm not sure they have really disappeared. After all, Bloomberg has the same number of terminals installed now that they did in 2008.