Morning Coffee: BlackRock can't stop people using AI in interviews. Bankers need to be looked after at bonus time

If you’re involved in hiring young bankers these days, you have to walk a fine line with the messages you’re sending out.  On one hand, you want candidates to have an appreciation of the importance of technology and to be familiar with the use of AI tools.  On the other hand, you absolutely don’t want to spend your days reading thousands of identical resumes and cover letters, all full of em-dashes and “it’s not just X, it’s Y” sentence construction.

Click here to join the bubble by eFinancialCareers, our new anonymous community. ✍️

As the head of talent acquisition at BlackRock, Nigel Williams has had more cause than most to think about how to tread that line.  Recruiters and hiring managers keep telling people not to use AI tools in Zoom interviews, but apparently they keep seeing the tell-tale sign of candidates “looking to the left and right”. 

But on the other hand, everyone is now expected to have “a basic understanding of prompt engineering, and how to question AI outputs”.  Williams is more concerned with finding out how people use AI in their everyday lives than their technical understanding of neural networks, though. He notes that applicants with no computer science background have often managed to acquire better and more useful AI skills than the techies.

Which makes sense, really. “Prompt engineering” is really just another way of saying “being able to ask clear questions and give instructions”. And while it’s important to be able to check the output of an AI, it’s neither more nor less important than being able to check any output, produced by anything.  In fact, the most important skill of all is the ability to question the assumptions and check the details in something you produced yourself.

In other words, the AI skills that BlackRock needs are really just the same skills that asset management has always needed, but you have to be able to apply them to AI as well as to interactions with other human beings.  There’s no special magic about the computer; it’s just another colleague.

Elsewhere, it’s becoming clearer and clearer that, despite a lot of bumps and scares along the way, 2025 is going to end up being one of the best years ever for Wall Street.  Trading revenues have been fantastic in Equities and reasonable in FICC, while the strong recovery in the second half has boosted investment banking fees.  As a result, there will be a lot of spoils to divide up.

Broadly speaking, every year’s compensation decision is a matter of deciding on how much money will go to the big three groups.  That is to say, bankers, traders and shareholders.  How do their claims stack up?

Both bankers and traders can reasonably argue that they deserve to be paid well; we can expect to see the normal political manoeuvring as one side points to their recent delivery while the other side points to their strong revenue pipeline.  But if there is any common sense in the room, the two great tribes of investment banking will unite against the real enemy; the investors.

Shareholders in big investment banks have had a good year – Goldman Sachs’ share price is up nearly 50%, Citi up 60% and even Bank of America up 25% for the year to date. After that kind of performance, it seems almost indecent for them to also ask for bigger-than-expected dividends and share buybacks.  Early forecasts suggest that 2026 could be even better, for those banks which are able to execute the business. 

So the “investor friendly” thing for management teams to do this year might be to invest in human capital, pay up and increase recruiting.  The decisions not to cut too far in the downturn appear to have been vindicated – this time it’s the shareholders’ turn to be “long term greedy”.

Meanwhile …

Bank regulators at the Financial Conduct Authority are still going to benefit from a generous remote working policy.  Although this is being reviewed, there is apparently no proposal to require more than three days a week. (Financial News)

The words “hiring spree” haven’t been seen for a while, but they’re back to describe Wells Fargo’s new ambitions.  Having broken into the top ten M&A rankings, Wells is keen to continue the momentum. (Reuters)

And Revolut is looking for “junior investment bankers, asset managers and private capital advisers”, because it’s aiming to bring private market investments to a fintech retail customer base. (Bloomberg)

Bryan Kahn, formerly of Prophecy Asset Management, has pleaded guilty to concealing trading losses. This was his part in the string of bad decisions and investments which caused Prophecy to collapse and nearly brought down the investment bank B Riley. (LA Times)

Crypto finance has reached a level of maturity where the big players are spending their time trying to get through layers of gatekeepers to Emirati royalty.  Although they are also holding “champagne-soaked parties” at the most recent Gulf bitcoin conference. (WSJ)

In 1998, Nick Leeson concealed enough trading losses to destroy his employer, Barings Bank. Having served his sentence, he built a subsequent career as a consultant and investigator to help other banks avoid having exactly that thing happen to them. (Business Insider)

The founder of private equity firm Reservoir Capital no longer has a golf cart.  He got rid of it at some point during the litigation over injuries caused when his adult son decided to play “wine pong” with a couple of friends, then go for a joyride in the golf cart and crash it. (NY Post)

Who says that hedge fund bros aren’t cool?  What do you mean, “everybody”?  And with Christmas parties where a dadrock supergroup plays hits by Pearl Jam, Led Zeppelin and Queen, the industry isn’t exactly beating the charges. (Louder)

All the reasons why you shouldn’t let your kids watch the series “Industry”.  It doesn’t include “it will give them an unrealistically glamorous perception of the life of a junior investment banker”. (Soap Central)

In case you missed our new weekly video series, The Coffee Run, you can watch last Friday's edition below.

Have a confidential story, tip, or comment you’d like to share? Contact: WhatsApp: http://wa.me/442079977910 (+44 20 7997 7910), Telegram: @AlexMcMurray, Signal: @AlexMcMurrayEFC.88 Click here to fill in our anonymous form, or email editortips@efinancialcareers.com.

Bear with us if you leave a comment at the bottom of this article: comments are moderated intermittently by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. You must take sole responsibility for comments you post on this site. We will take reasonable steps to weed out anything that we consider to be offensive or inappropriate.