JPMorgan chief operating officer Matt Zames is setting his sights on Silicon Valley.
In a letter titled “Redefing the Financial Services Industry” in JPMorgan’s 328-page letter to shareholders, Zames ran through the bank’s tech strategy.
Zames said attracting tech talent from Silicon Valley and technology firms is an integral component to that strategy. The letter said:
“Attracting, retaining and developing top technology talent is paramount, and we cast a net far and wide to find the best and the brightest. In 2016, 32% of our senior hires in technology came from non-financial services firms. We had a 10:1 applicant-toposition ratio for our Technology Analyst Program, which targets graduates of global universities that have strong technology programs.”
The bank spends more than $US9.5 billion on technology, according to the letter, with an increasing percentage of that budget going on new investments and innovation.
“Our strategy is a combination of build, buy and partner in order to continue delivering the best digital products and services at scale,” Zames said. “Our relationships with the external technology ecosystem helped drive value across our technology focus areas, including next-generation data and analytics platforms, such as Hadoop and Spark.”
Zames highlighted a number of fields such as machine learning and robotics in which the bank made huge inroads with new initiatives.
Here are some of the highlights from the letter (emphasis added):
New design standards
- “We are also defining design standards to provide a common technical framework for development of applications of a particular type, for example, big data analytics. This will significantly reduce rework and duplication in the software development life cycle where, previously, application developers have had to create their own one-off frameworks.”
A new private cloud
- “In 2016, we launched a new private cloud platform called Gaia, designed to provide developers with rapid agility — so that they spend more time developing and less time provisioning infrastructure and application services. Over 5,000 developers already have begun to use Gaia. By the end of 2017, we expect to more than double the number of applications hosted on the platform.”
New global data center strategy
- “In 2016, we invested in a new global data center strategy to consolidate our existing facilities into fewer, larger, more modular sites. In early 2017, we opened our first new state-of-the-art data center, which is the strategic model for all future builds globally.”
New Market Risk platform
- “Last year, we re-engineered our Market Risk platform, one of the largest in-memory risk analytics platforms in the world. The platform now manages over 1 billion risk sensitivities and provides visibility 17 times faster than the prior system while delivering a more granular and holistic view of the firm’s risk exposure.”
- “We established an internal center of excellence to drive best practices around a growing pipeline of robotic process automation, including systems access administration, for which we expect to automate 1.7 million requests in 2017. We have line of sight into more than $US30 million run rate saves from robotic process automation in 2017, a savings that, coupled with other optimization efforts, will continue to increase substantially in the years to come.”
- “We are initiating pilots for a broad range of machine learning use cases — from detecting anomalies for fraud and cybersecurity, to generating targeted trading strategies to share with clients, to optimising our clientservicing channels. We are only at the very beginning of tapping the potential capabilities of machine learning and its benefits to our business.”
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