Investment Banking Traders

Employment of traders, research analysts, investment bankers, and sales workers declined significantly during the 2010s, according to Coalition Ltd., a London-based research firm. Factors that contributed to this decline include:

• the introduction of algorithmic trading (which has reduced the number of traders needed to complete trades)
• the reduction in proprietary trading as a result of increasing government regulation
• an overall reduction in revenue from trading (which has prompted many investment banks to focus on other lines of business such as wealth management).

In September 2019, Fortune reported that UBS was planning a major reorganization of its investment banking operations, which potentially called for hundreds of layoffs. In addition to Deutsche Bank's withdrawal from equities trading, other leading banks, including Barclays, HSBC, Citigroup, and Société Générale, also had eliminated workers in 2019, mainly in their respective trading businesses. Fortune noted that banks' technology investments had significantly impacted the field of securities trading.

Trading in standard products (such as equities, fixed income, currencies, and commodities) is increasingly automated, but traders who are specialists in trading complex financial products (e.g., mortgage-backed securities, asset-backed securities, collateralized mortgage obligations, and collateralized debt obligations) will still find good opportunities. Additionally, traders who have developed skill at designing computer trading algorithms will have much stronger employment prospects. Finally, investment banks are increasingly focusing on the use of data analytics to increase profits and improve efficiencies. Traders—with their innate analytical and detail-oriented natures and backgrounds in finance and mathematics—are good candidates (if they pursue additional education) for work in data analytics.