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JPMorgan Software Does in Seconds What Took Lawyers Many Hours
- eb0la 10y agoI would like to see what's behind the hood. Since JPM is a bank I guess they used SAP HANA using the text analysis services... but I would like to know a bit more about the project. Any pointers?
- devy 10y agoAccording to this same Bloomberg article, JPM has 20k+ developers, I am fairly sure they develop a significant portion of the softwares they use internally, including their own cloud. See the original article, 8th paragraph (under the sub heading "Redundant Software")
- F_J_H 10y agoYou've likely heard the quote that "every company is a technology company", mostly used in the context of companies needing to be doing everything they can to leverage and exploit new technology, or they'll be left in the dust by more proactive competitors. With that in mind, a key quote for me in the article was this: >To help spur internal disruption, the company keeps tabs on 2,000 technology ventures, using about 100 in pilot programs that will eventually join the firm’s growing ecosystem of partners. I think there will be a role emerging within Enterprises, (sort of like an "insurance broker" who finds the best coverage options among a sea of choices), that will be responsible for surveying new technologies that could potentially help the firm, and running pilot programs to see how they potentially help make the org. more efficient or more competitive. One could argue that this is really the CTOs role, and it is, but often CTOs are focused on building their own technology, or maintaining existing legacy systems, and not so much on finding and implementing new technology that has not yet hit the main stream. So, at least the focus needs to shift. *edit: typos
- godzillabrennus 10y agoThere are a growing number of consultants who have realized that a model exists helping enterprises work with startups.
- deleted 10y ago[deleted]
- flat6turbo 10y agoisn't that what the CIO is responsible for?
- F_J_H 10y agoIt depends on whose definition you use with respect to the CIO/CTO role. In my experience, CIOs are typically more focused on the internal IT infrastructure, keeping it secure, running smoothly, etc., (i.e. an more inward facing almost operational role), whereas a CTO should be outward facing looking and building technological advantage for the firm (i.e. a more outward facing commercial role). However, I've seen it argued both ways. I'd be interested to hear what others think on the differences in the CIO and CTO roles.
- azhenley 10y agoFrom what I have seen, a lot of [smaller?] banks don't even have CTOs (including the one I worked at), just CIOs which ultimately fulfilled that role. They might have VPs of Technology though (usually along with some other role, such as CIO). Unfortunately, the distinction is usually lost on me too.
- fnord123 10y agoWhy would the Chief Investment Officer at a bank be involved in which technologies to adopt? Or did you mean Chief Information Officer or Chief Innovation Officer (which Wikipedia says exists, but I had never heard of)?
- azhenley 10y ago
- ycombinete 10y agoThis makes me wonder if we'll be entering a legal world that's complex to the degree that only computers can understand it.
- ams6110 10y agoAnd a world where if your contract does not meet with the approval of the computer, you are screwed with no recourse just like you are when Paypal decides to freeze your account because one of their algos detected "fraud"
- tluyben2 10y ago> when Paypal decides to freeze your account because one of their algos detected "fraud" Even thinking about the times that happened to my company brings red in front of my eyes. Not many companies are that bad luckily. Google adsense/adwords comes close.
- raverbashing 10y agoBlaming the algo is a nice cop-out by Google and Paypal and on top of that they can afford canning their customer without many issues for them But how much is that going to cost them over long term instead of having actual thinking people reviewing the cases remains to be seen
- tehlike 10y agocome on. there are >6b people on earth, with many many fraudsters trying to make money at other people's expense. It's a problem that has to be automated sooner or later. Computers are also much faster in fraud detection. You use your credit card at some store that you have never been, at an odd hour, and your bank triggers a fraud lock, and declines the transaction. That's efficiency. When there are billions of transactions occurring every day, of course a small error rate will reflect itself on a large number of false positives. PS: goog employee, but i appreciate fraud detection a lot (especially when it comes to how easy it is to leak SSN in this country, and how useful it is for obtaining credits) Edit: fact check. there aren't 6b people using computers obviously.
- TazeTSchnitzel 10y agoLaws resemble computer programs in many ways, so I suppose it is only natural that computers be made to interpret them.
- minikites 10y agoThe edge cases for people under such laws are much more serious than most computer edge cases.
- TazeTSchnitzel 10y agoIndeed. That's probably why in some jurisdictions, decisions are not allowed to be blindly made by computers exclusively.
- Erik816 10y agoThe edge cases are also exactly when lawyers get involved. If the law is clear, there's not much work for a lawyer to do (you plead guilty, you settle the case, you don't sue in the first place, etc.). Dealing with ambiguity is the main skill of a lawyer.
- lukasm 10y agoThe problem is intent and context. Reckless driving vs Manslaughter.
- Eridrus 10y agoStatic analysis is far from a solved problem, so I do the think that's a useful analogy for considering whether we can automate some analysis :)
- amelius 10y agoSome of my friends who are now lawyers were really bad at math in high-school, so I'm not sure that equating law to computer programs is how it works in practice.
- epmaybe 10y ago
- isubkhankulov 10y ago> Not all of those bets, which include several projects based on a distributed ledger, like blockchain, will pay off, which JPMorgan says is OK. One example executives are fond of mentioning: The firm built an electronic platform to help trade credit-default swaps that sits unused. so it looks like JPM might have written off "blockchain"?
- _-__--- 10y agoTo me, that reads as the author writing off blockchain moreso than the JPM representative. To be fair, there are plenty of ways that blockchained systems can fail.
- Rmilb 10y agoThey have not written off blockchain, it was just announced yesterday that they are founding members of the new "Ethereum Enterprise Alliance". http://www.zdnet.com/article/microsoft-intel-banks-form-enterprise-ethereum-blockchain-alliance/ http://www.zdnet.com/article/microsoft-intel-banks-form-ente...
- Taylor_OD 10y agoIn Chicago JPMorgan is where a lot of software developers go to work for 5-7 years before getting a VP promotion and leaving for a C level role. I've seen dozens of developers follow this exact track. Glad to hear they are doing something interesting during that time.
- technofiend 10y agoC level where? I'm curious what size roles you see people rolling into out of a Fortune 500 like that.
- Taylor_OD 10y agoDid a quick glance at linkedin connections who use to work there. Seems a lot of them started their own company or moved to director level roles. Some C level. Examples: https://www.linkedin.com/in/mjwaitzman/ https://www.linkedin.com/in/mjwaitzman/ https://www.linkedin.com/in/amir-wasti-2964491/ https://www.linkedin.com/in/amir-wasti-2964491/ https://www.linkedin.com/in/chuckcooper/ https://www.linkedin.com/in/chuckcooper/ https://www.linkedin.com/in/mattstratton/ https://www.linkedin.com/in/mattstratton/ https://www.linkedin.com/in/aprahamian/ https://www.linkedin.com/in/aprahamian/ https://www.linkedin.com/in/greggawheeler/ https://www.linkedin.com/in/greggawheeler/ https://www.linkedin.com/in/kamarajan/ https://www.linkedin.com/in/kamarajan/ https://www.linkedin.com/in/goodfellow/ https://www.linkedin.com/in/goodfellow/ https://www.linkedin.com/in/efrain-perez-3858b41/ https://www.linkedin.com/in/efrain-perez-3858b41/ Not all of those line up exactly with what I was talking about but my main point is that its a large stepping stone company.
- technofiend 10y agoThank you for the well researched reply.
- gaius 10y agoA VP in a bank is mid-level, an investment bank will have literally thousands of VPs. You could hop from MD (2 levels above VP) to the c-suite perhaps, but there are still hundreds of MDs.
- thomasjudge 10y agoThis article is really thin on details about the system featured in the headline
- js2 10y agoMeanwhile I'm going through a mortgage refi and the mix of old and new technology is comical. I was hoping things had advanced since I last went through this a decade ago but not so much. This is through eRates Mortgage and you might think the "e" stands for electronic, but I'm not so sure. So far I've had to: - Fill out an online credit application form, which among other things ask me what year I started my last job and converted that to "years and months" but was off by one since it appeared to be doing math as if the current year is 2016. That was at one particular web site. - On another web site, I was then able to e-sign about a dozen documents. However, about half a dozen documents I had to print out, sign, scan, then upload to a third web site. - One of the forms had an error, so I received an email from a mortgage officer that read "You've received an encrypted message from XXX@financeofamerica.com. To view your message Save and open the attachment (message.html), and follow the instructions. Sign in using the following email address: me@example.org". This comically required me to register with live.com so that I could read the actual email and reply with a corrected version of the form via an outlook web interface. - Yet another mortgage officer contacted me for additional forms, these were sent as PDF attachments that I had to print, sign, scan, and email back (over regular email this time) as further attachments. - There is no online site I can use to track the progress of things. I just have to call or email periodically. - The forms as you might imagine are a mix of ancient government mandated forms and sundry other requests that are from the loan company's underwriting department. On a semi-related note, I also just rolled over a 401(k) which was also unable to be done electronically. The old 401(k) institution overnighted me a check which I had to combine with a form I printed out from the new 401(k) institution, then I had to overnight those to the new institution. 3+ days of lost market gains.
- dboreham 10y agoFinally an article about self-driving lawyers. My belief is that we won't have (real) self-driving cars until long after we've automated lawyers -- legal work being a much more constrained, simpler problem without too much potential to kill people.
- kriztw 10y agoDefinitely not for full automation. The question "do I have a case?" could involve basically anything, and sounds very AI-complete to me. Of course, discovery and a lot of the repetitive work can be automated much more easily, but that's more like keeping the car in a highway lane, which we can already do for cars.
- funtober 10y agoAttorney here. Frequently do case evaluations for my firm. I prototyped this last year. It was not as hard as you would think if you have some experience in the area of law.
- eb0la 10y agoThere are "self-driving-lawyers" for niches like this one: https://www.forbes.com/sites/parmyolson/2016/06/28/this-teens-lawyer-bot-is-busting-thousands-of-parking-tickets/#6adeeb6920dd https://www.forbes.com/sites/parmyolson/2016/06/28/this-teen... I bet the bank is offloading to "the system" the niche find-and-seek jobs that interns did before. Something like "find me all the contracts for mortgages in seattle between 1996 and 2004 on fixed rate loan and with guarantees in the same state, and delaware, and _____". Then bundling all to a senior lawyer and then offloading to the CRM.
- sjy 10y agoThen why are there so many more drivers than lawyers?
- PatentTroll 10y agoAbsolutely. If your job is data in -> data out, your job will be taken by a computer. Most of the work lawyers do is just this. Human lawyers will be relegated to client relations and high level strategy. Most documents will be first drafted by a computer, then edited by a human. So law firm partners will still have work, but the need for associates will dry up as computers take over
- EternalData 10y agoThere has always been a financial-legal-accounting complex that has accounted for some large percentage of the economy. That used to be a large part of the labor-capital compact -- at least some of the proceedings of capital were going to well-priced labourers who could build the foundations of the upper-middle class or slightly above. Capital and its holders are getting more and more naked in their attempt to save costs. Individually, this is great -- spurring automation forward certainly frees people up. In aggregate, however, if political/social factors aren't taken into account with automation, there will be a spate of people who think they will have been robbed of their rightful earnings and their purpose in life -- and that will have consequences, intended and unintended.
- dragonwriter 10y ago> That used to be a large part of the labor-capital compact No, it was just a necessary cost of maximizing capital returns given the available tools. Elite labor often mistook itself for a natural class ally of the capitalist class because of this, but that was a false belief driven by transitional rather than fundamental conditions.
- _pmf_ 10y agoA cynic may say that a lawyer takes many hours because they are billable.
- 0xdeadbeefbabe 10y agoA lawyer would say, "I bill in 15 minute increments."
- ltdanimal 10y agoI think "360,000 hours" makes it a little more impactful. Was thinking 20 before I clicked the article
- Zork212 10y agoAutomation: less jobs, Government (at least in Europe/Cdn) say more people we need to import more people to fill the jobs... but millions of jobs will disappear over the next 10 yrs.
- obsolete_ideas 10y agoSupply and Demand: The supply of humans does not balance with the demand for humans; there are just too many people—society doesn't need them. Perhaps it's time to start thinking earnestly about the supply-side economics of population; perhaps, society should reconsider how it subsidizes reproduction (or lack there of). Is it better to use resources to build more people who have a lower quality of life, or is it better to use resources to build a higher quality of life for a population of fewer people?
- jsmooth47 10y agoThere will be a point where "software" will automate all of this stuff. 360,000 hours is a ton of full time employees. I wonder how they feel, and if they are typing up resumes as we speak. Looks like machine learning and similar skills are going to be more sought after than the normal finance or law skills!
- adrenalinelol 10y agoWhile this article seems to be a bit light on specifics, the automation of most legal practices is something that ML will have a great affect on in the near future (imo). Junior associates get paid insane salaries to do very meaningless grunt-work at biglaw firms. Those who aren't on track to become partners, are essentially burning the firms' resources, thus there exists an big incentive to automate the work.
- Erik816 10y agoJunior associates are not burning the firm's resources. They are the firm's resources. They generate billable hours, which is how the partners make money. Which is why most of the legal profession is much slower to replace them than you might think.
- PatentTroll 10y agoThis is true too. The billable hour billing practice incentivizes inefficiency. In some respects that makes the industry ripe for disruption, but it's staying power may suggest the opposite, that is, that the business isn't about being efficient. Sometimes as logical people we assume everyone else is logical too. But my experience is that law firms are stuffed with worker bee types who don't see the world that way. They are not the innovative logical types who would develop something to increase efficiency
- baron816 10y ago$9.6 billion technology budget?! What do you think the Federal government's technology budget is?
- vasili111 10y agoWhy not to use same thechnology for checking source code for errors?
- ImTalking 10y agoI think what JPMorgan fails to realise is that their entire business will be subject to automation. In a way they are signing their own death warrant. Obviously they will reap the benefits of AI while it's in it's infancy, but it won't take a quantum leap to realise that most of their business can be replaced by software eventually.
- dowjones 10y agoIn the early 1990's, JP Morgan developed software tools it packaged and sold as "RiskMetrics." It standardized the way most banks measured and reported their portfolio risk. For example, it was now easy to determine how likely a portfolio would lose, say, 5% of its value. This underlying concept, called Value at Risk, was baked into the RiskMetrics tool and quickly became the default methodology for measuring risk among traders but also regulators, bank management, and external portfolio managers and investors. The problem was VaR had never really been tested in a real-world meltdown situation. Its models all assumed even under duress, markets acted rationally and traders' behavior was uncoordinated and uncorrelated. In 1998, the spectacular failure of Long-Term Capital Management, was enabled by its reliance on VaR (among other things, like bad trades and enormous leverage). In a crisis, markets were NOT acting rationally, and neither were traders, causing losses much larger than anticipated by VaR. Unfortunately, people tend to repeat mistakes, so in 2007-8, once again, banks all over the world that relied on VaR calculations to tell them their risk portfolio was small and manageable, soon found out that it wasn't. http://www.nytimes.com/2009/01/04/magazine/04risk-t.html http://www.nytimes.com/2009/01/04/magazine/04risk-t.html tl;dr: JP Morgan would be among the last companies I would trust with a software innovation reliant on new, breakthrough algorithms.
- beepboopbeep 10y agoThere's a big difference between calculation and automation though. This article starts with an operation that's a bit of both, but the big underlying theme here is the automation of data digestion. For all the pomp and pedigree of banking, it's mostly just moving data or digesting data. Because of how complex banks are, they're easily a decade behind the times and still HEAVILY reliant on manual processes in excel. Any real "streamlining" of processes is done through patchwork fixes with no systemic reworks being done. This article is implying systemic reworks. Banks live and die on their NII, and would gladly gut their back and middle office personnel (most have done so by outsourcing to India and Hungary) with automation. Truth be told, rightfully so given the menial tasks of those jobs.
- dowjones 10y ago>> The program does the mind-numbing job of interpreting commercial-loan agreements A computer program that interprets written language -- natural-language processing -- is reliant on highly-advanced, complex algorithms and AI to do the interpreting. This is much deeper than mindless "automation" and requires absolute trust in the accuracy of the underlying algo (or, hiring back some of those humans).