Technology is taking over Wall Street, and it means investment banking jobs of the future will look very different than they do today.



Traders are obviously no strangers to the growing use of tech. At most exchanges trading floors have been replaced by servers, and plenty of hedge funds rely on computer programs to make buy and sell decisions.



But in the next wave, computers will replace humans –who are expensive and prone to error – entirely, and jobs will go to those who can build and control the technology instead. That's the conclusion of a new report from Tabb Group.



Financial market participants currently spend more than three times more money on people than they do on hardware, software and data, according to the report.

The report, written by consulting analyst Paul Rowady, likens the digital transformation to the industrial revolution.

Under the sub-title of 'Human Latency', the report said: "We see the true and blunt objective of digital transformation as the elimination of dependence on human responsibility for tasks and processes wherever possible."



Where humans can't be "eliminated" technology will make them faster at their jobs, Rowady writes.



"Though digitization likely means industry-wide reduction in net headcount, it is also likely to require a shift in the mix of skillsets as well."



For example, specialists in human-computer interface design and user-experience design will be in demand. So will data scientists, which the report dubs as the new "quants."



This is already happening. Goldman Sachs employs more programmers and engineers working on tech matters than Facebook, while JPMorgan chief Jamie Dimon said in his annual letter to shareholders that: “Silicon Valley is coming." The dark bars represent the results from a webinar poll, and the light bar the results of a poll at a live event. Tabb Group

The focus on cheaper and efficient technology comes at a time of depressed returns for the investment banking industry. A combination of increased regulation, low interest rates and reduced volatility has crimped bank’s return on equity, a key gauge of returns to shareholders.



The digital transformation will help, according to the report.

"In some ways, this fundamental objective of digital transformation may be interpreted as a dire prognosis for many or most employees since the digital transformation in financial services is essentially about both improving outcomes and lowering costs."