I 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.
JPMorgan Software Does in Seconds What Took Lawyers Many Hours
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Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#92You'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…
There is team that does that here at my company. They call themselves the innovation team
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#93Meanwhile 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 jo…
The mortgage documentation problem is on my list of things to work on starting Q3 2017. I'd love to hear more about what's pissing you off -- may I email you?
Had a company that was solving sort of this problem a while back (early 2000s). Read in forms (1003 for example), did automated underwriting (hooked in with Fannie Mae), pulled in rate sheets from different Banks to do automatic rate calculations for loan officers. Rate sheets were loaded in daily. There was a rules engine to cover the many complex rules required to determine if a loan was viable for a given 1003 form, etc.
Managed warehouse lines, etc.
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#94Earlier quoted context omitted.
The mortgage documentation problem is on my list of things to work on starting Q3 2017. I'd love to hear more about what's pissing you off -- may I email you?
Had a company that was solving sort of this problem a while back (early 2000s). Read in forms (1003 for example), did automated underwriting (hooked in with Fannie Mae), pulled in rate sheets from different Banks to do automatic rate calculations for loan officers. Rate sheets were loaded in daily. There was a rules engine to cover the many complex rules required to determine if a loan was viable for a given 1003 for…
The issue has never been the backend systems at banks -- I've worked with that stuff starting from origination through securitization and on to secondary market trading.
The problem is the customer abuse ("needs list") that is a hallmark of underwriting. There has to be a better way to get all that information from the customer in the vanilla case.
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#95This makes me wonder if we'll be entering a legal world that's complex to the degree that only computers can understand it.
Probably not any time soon. The issue is that when push comes to shove, a contract is something that gets interpreted by a court. Judges are okay calling in expert witnesses to look at various kinds of evidence, but contract interpretation is a core part of their responsibility and they aren't going to willingly pass that off to computers. You might see automated arbitration and evolution of contract language to faci…
This is a great point! Thank you.
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#96In 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
tl;dr: JP Morgan would be among the last companies I would trust with a software innovation reliant on new, breakthrough algorithms.
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#97In 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 am…
There'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.
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#98Finally 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.
Absolutely. 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
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#99While 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.
Junior 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.
This 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
Re: JPMorgan Software Does in Seconds What Took Lawyers Many Hours
#100In 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 am…
There'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.…
>> 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).