Inside the JPMorgan Chase plan to digitize dealmaking
(Bloomberg) -- Huw Richards is an old-school, bond-market banker with a futuristic new role.
Reassigned in May to head digital investment banking at JPMorgan Chase & Co., he’s building out his team, seeking to add 20 to 30 people by year-end. Their mission is to find ways to use emerging technologies to make the firm’s dealmakers more competitive.
Machines will help with key parts of underwriting stocks and bonds, according to Richards. That might mean, for example, mining data and using predictive analytics to pinpoint the best time for a corporate client to tap the debt market.
He doesn’t think technology will dramatically impact carrying out complex transactions, such as mergers and acquisitions. But machines can at least help bankers spot and analyze deal opportunities and present them to clients.
It’s part of a broad push at JPMorgan to use emerging technologies to reinvent longstanding practices on Wall Street. By 2016, the firm had figured out ways to use machine learning to parse commercial-loan agreements, shaving 360,000 hours of annual work by lawyers and loan officers. This year, it tested a debt-issuance application using blockchain to sell certificates of deposit. It’s also using Amazon Inc.’s Alexa to help investors access analyst research.
“We want to make JPMorgan information available at all times for clients,” Richards said in an interview.
His work also involves developing a technology platform for clients, known as the “corporate finance dashboard,” that was made available to many big North American companies at the start of 2016. The platform, which also offers instant messaging, presents customers with apps for investment-banking services. Or as Richards put it, a “delivery channel for whatever product innovation we have.”
Wall Street rivals including Goldman Sachs Group Inc. and Morgan Stanley are building similar platforms. Earlier this year, Goldman unveiled a dashboard that gives clients insights into their shareholders and analyzes whether activists may interfere in their business.
Richards said his team will include traditional bankers who’ve worked on initial public offerings, debt sales and takeovers. But he’s also seeking coders and data scientists.
Richards landed his new job after an off-site meeting of JPMorgan investment bankers in Miami. During the April gathering, Co-President Daniel Pinto asked attendees to explain what their businesses will look like in five to 10 years. Within days, emails were flying about creating a digital investment banking group.
Richards joined the New York-based bank in 1999, and spent much of the past decade co-leading investment-grade finance, often underwriting bond offerings for blue-chip companies. He’s also on the board of H4, a tech venture that joined JPMorgan’s in-residence program, a group within the investment bank that helps innovative companies get their businesses running. H4 helps digitize documentation for deals.