Traders Need To Unlearn Bonus Culture, Says UBS

(Bloomberg) — Chris Purves has been at the forefront of markets for more than a decade: from algorithmic commerce to machine learning.

Now, the head of the Strategic Development Laboratory at UBS focuses on the human survivors of the technological invasion, trying to convince them that things will never be the same again.

Traders will have to – in the jargon of Silicon Valley missionaries – to “unlearn” how they always operated.

It’s not just the fact that the software can know the next step before they do.

The extinction of an entire way of life is imminent, according to Purves’ prediction: the end of the bonus culture.

Compensation will be the last frontier in the technological attack on the finance industry.

Purves is transporting traders to electronic systems as the era of legendary gamers chasing $100 million in salary is a thing of the past.

What is to come is the increase in bureaucratization, an evolution that makes the assessment of individuals less important – and with it the need to reward them as they expected.

“We want to hire people less motivated by bonuses, profit and loss and more by the long-term objective of what the market will be like 10 years from now,” said Purves, who works in London.

“The idea that you are responsible for your own destiny is gone. Now it’s teamwork.”

Actions in this direction are increasing. Coders have been granted licenses to trade shares on JPMorgan Chase, while the category is in the focus of Goldman Sachs’ trading division’s biggest hires. Citigroup plans to hire 2,500 programmers this year.

The competition for talent from companies like Google and Facebook has not caused bonuses among banks to increase.

And while tech skills are still in high demand, that doesn’t always translate into higher pay. Most operator salaries are expected to remain stable or decline, according to an analysis by recruiting firm Options Group.