In Support of Digital Content…
I have wanted to add these thoughts to our Feed for a long time: Though I suspect that nothing of value seems easy to accomplish these days, being a knowledge worker and content developer seems especially difficult given that the bar for being a content developer and, at least, pretending to be a knowledge worker has never been lower. It has become all too easy to become a producer of content given the tools and interconnectivity of the [...]
The Dawn of Operational … Beta?
If you've heard of the term operational alpha, then you likely know that it is a trending concept - similar to digital transformation - that seeks to leverage the latest digital-era tools and methods to foster increasing operational agility and resilience, particularly among asset managers. (Think: Citadel, the creator of the term - and one who arguably walks this walk as well as anyone.) Moreover, if your current job is related to implementing tools and methods that are [...]
Context Machine: Introducing a Techno-Operational Benchmarking Framework for Asset Managers
Executive Summary Riding the wave of the FinTech juggernaut, technology now permeates all aspects of the financial services ecosystem; front-to-back, top-to-bottom and across the entire business segment spectrum. Any lingering gaps between technology strategy and business strategy are closing; making them indistinguishable from one another. And yet, for all the promise of the revolutions in artificial intelligence, cloud and big data, such attempts are met with unforgiving challenges. Most players in this ecosystem are still using dulled intelligence [...]
Broker Tech Spend Speaks Volumes
Broker spending on technology is one of those topics that rises to the top of the headlines from time to time, particularly given how much the market landscape has shifted in the past several years - and how competitive, regulatory, and new market drivers threaten to change that landscape even more along the road ahead. So, during the course of developing research on a related topic, we had occasion to expand our modeling in the area of market [...]
JPMorgan’s Massive Collaboration Experiment
Sitting in on the Symphony Innovate 2017 conference last week in New York, the figure that stood out for me was not that Symphony had already achieved 250,000 users so far in 2017 - more than doubling over 2016 - but that J. P. Morgan (JPMC) represents about 60,000 of those users. (Did I hear that right?!) This is roughly 25% of JPMC's current total headcount of over 240,000 - and, upon further analysis, is likely concentrated within [...]
Man or Machine: Who Are The Real Trading Champions?
Despite dramatic changes to the fortunes of quantitative trading strategies of late, they still represent the extremes of "technology leverage" in the global markets ecosystem. This means that due to a high level of workflow automation, these types of firms generate more output - as measured by revenue per employee (RPE) - than any others in the industry. Or, so we thought... In the context of its broader research mission, Alphacution has been focused - perhaps even a [...]
Bulge Bank Headcount Index: Rare Uptick in Q2
It's only happened twice since the peak, recorded nearly 6 years ago (at the end of Q3 2011): Alphacution's bulge bank headcount index has recorded a rare uptick, as of the end of Q2 2017 (see Exhibit, below). Now, of course, it may be too soon to sound the trumpets that a major turn has been made for headcount in the global banking sector. The moves - in either direction - are still small. Although, who knows? Maybe [...]
Automation May Require More People
Here's a quick jolt of provocative thought, just in case your brain - like mine - has become a little soft over these summer months: Talk of AI and various other forms of process automation have reached a fever pitch. With that phenomenon comes a flood of new intelligence - and also a heavy dose of mythology. Sometimes the difference between the two is not immediately obvious. The idea that automation has a tendency to kill jobs is [...]
Operational Clues: Asset Managers Shifting Strategies
You can track shifting asset class and/or strategy allocations over several years for a long list of asset managers, and then add it all up to arrive at a data-driven industry trend. Easier said than done. This is an extremely heavy lift without the aid of a database that has already aggregated such information - if at all. But, we think there is another way to generate such a signal that yields a similar conclusion (if you know how to read the tea [...]
Technical Leverage in Context
Alphacution defines technical leverage as the difference between revenue per employee (RPE) and technology spending per employee. In the parlance of our T-Greeks benchmarking framework, this difference is also known as T-Spread. I stumbled over the chart below - 50 companies in the S&P 500 with the highest RPE rankings for 2016 - recently and thought it would be notable to add to the knowledgebase. Since our modeling and analysis currently focuses exclusively on companies related to the [...]
