Wall Street’s tech transformation continues. Our finance team had a number of stories on these efforts this week, each in their own way showing the ways in which tech is impacting competition.
For some, investments in tech are helping drive additional revenue. Goldman Sachs for example for a long time struggled to win business with quant hedge funds, which require the most up-to-date technology for their trading. CEO David Solomon told us last month that “the picture is very different” now.
That progress showed up on Tuesday when the bank reported better than expected equities trading results.
For others, tech hires promise a fresh pair of eyes and new opportunities. Morgan Stanley Investment Management, for example, poached a Google machine learning expert for a newly-created role as head of data and analytics.
“This is a critical component to the future success of our business,” MSIM’s chief operating officer said in a memo announcing the hire.
Private equity giant KKR hired Emilia Sherifova, the top technology officer at Northwestern Mutual, to develop a data-driven approach she says will play a “central role” in KKR’s next stage of evolution. And Deutsche Bank hired AQR’s head of technology to help lead a $15 billion push into digital with a focus on the cloud.
For some newer players, the lack of legacy tech is proving a competitive advantage. Chris Randazzo, Rockefeller Capital’s private wealth head, highlighted the benefits of “having a blank piece of paper” when it comes to technology for example. Before he joined Rockefeller, Randazzo was chief information officer for global wealth and investment management at Morgan Stanley and at Bank of America Merrill Lynch
“The hardest thing with the massive legacy systems that were built over 10, 20, 30, 40 years, the challenge was trying to innovate at the same time while you’re running multi-billion dollar businesses supporting millions of clients and millions of accounts,” he told BI’s Meghan Morris.
And some appear to be taking inspiration from consumer tech success stories like Netflix and Spotify. Charles Schwab rolled out subscription pricing at the end of March for its robo-adviser’s premium service, replacing the traditional fee scale that charges a percentage of assets invested. The robo-adviser said it has added $1 billion in assets since making the pricing change, with a 25% increase in account openings.
As always, we’ll be keeping track of these trends and more.
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Quote of the week
“Most of the time, when we find tech people who are interested in healthcare, they spend on the order of three months before they realize how screwed up it is.” – Krishna Yeshwant, who coleads the life-science investment team at GV, on preparing tech entrepreneurs to jump into the healthcare industry.
- Rosalie Chan talked to Rohan Kumar, who leads data applications on Microsoft‘s cloud. He said that its tech is “battle-hardened” and ready to face Google and Amazon on his home turf.
- Troy Wolverton talked to Nick Washburn, a senior managing director at Intel Capital, about what the VC is looking for in new investments.
- Alex Nicoll talked to Brendan Wallace, cofounder of VC firm Fifth Wall, about the fund’s $503 million fund focused on investments in real estate technology.
- Tanya Dua talked to ADT CMO Jochen Koedijk about how the 145-year-old home security company is trying to ditch its “dinosaur” image by taking its media-buying in-house.
- Emma Court and I talked to Vas Narasimhan, CEO of Novartis. He told us how wearing jeans to work is helping transform the Swiss company.
- Jeremy Berke talked to Curaleaf CEO Joe Lusardi after it snapped up Grassroots Cannabis for $875 million about what’s next.
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As French drugmaker Sanofi’s new chief digital officer, Ameet Nathwani thinks tech like AI could help solve some of the healthcare system’s biggest problems.
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