Lori Beer, J.P. Morgan's investment bank CIO on fintech, funky offices and not being "one of the guys"
When Lori Beer, the recently-installed chief information officer of J.P. Morgan’s corporate and investment bank, started out in 1989, technology was much more of a man's world than it is today. More often than not, she was the solitary woman surrounded by team of male nerds.
Fitting in, she says, is not the best thing to do. “My advice would be to stop trying to be like one of the guys,” she says. “I spent years being the only woman on predominantly male technology teams, but the best thing you can do as a woman in technology is to stay focused on the value you can bring as an individual. Tech teams need diversity of perspective.”
In a sector still saturated with men, Beer quickly realised that she could bring something different. “Often there’s a social and emotional aspect to the end product and I learned early on that this was something I was good at managing and so I made the most of those characteristics.”
Beer was promoted to CIO of J.P. Morgan’s investment bank in June last year following the departure of Mark Ashton-Rigby to Barclays, having previously joined as global head of banking technology in 2014.
Automation in the investment bank
She has a gargantuan team – around 10,000 people work in tech for J.P. Morgan’s CIB, which is approximately 25% of IT headcount across the bank. J.P. Morgan spends $9.5bn every year on technology – or 17% of its total costs – and has an army of people managing that.
Beer says that the main priority for technology across J.P. Morgan’s investment bank right now is using it “efficiently and effectively” as well as changing how the bank operates.
“One example is our use of robotics and machine learning for automation,” she says. “We’ve deployed bots to implement some of the manual operational processes across the investment bank, which has allowed our staff to focus on other things.”
This has already happened in areas where there’s an obvious amount of manual heavy-lifting – payments, custody, fund services and trading – but machine learning is also creeping towards J.P. Morgan’s investment banking division, says Beer.
Right now, J.P. Morgan is using a machine learning programme that allows its equity capital markets investment bankers to identify which clients are best positioned for follow-on equity offerings. The idea is to both free up time for bankers and allow them to new generate business, rather than using AI to replace people. It will soon be rolled out to other areas of the investment bank.
J.P. Morgan is also using technology to make developer’s lives easier, as well as engaging with the investment bank’s younger employees, says Beer. One example is using “automated code scanning”, which saved 120,000 hours of development work last year, according to the bank’s COO Matt Zames.
Beer says that millennials at J.P. Morgan use technology in “a much more integrated way” than previous generations, and a key to employee retention is ensuring that it taps into that.
“For example, big data is a buzzword that’s thrown around a lot,” she says. “For us, that means giving our employees access to real time information, at scale and using machine learning to identify patterns and provide insights, which reduces man hours and mundane processes.”
J.P. Morgan’s tech team might be big, but it’s growing rapidly. We understand from recruiters that the plan is to hire 6,500-7,000 across the bank in 2017, although J.P. Morgan didn’t confirm this, and that hundreds of people were brought in the first quarter.
Beer says that the priority for the CIB this year is to bring in “engineering talent”, but that working for the bank is not just about “writing lines of code”.
“In an investment bank, you need to build commercial technology projects that operate at scale,” she says. “There’s not a specific development language we’re hiring for – it’s more about having a commercial mindset and always thinking differently. It’s an underestimated trait in technology – you’re solving complex problems for clients and internal business partners. It requires creativity.”
Tapping tech hipsters
Zames said in J.P. Morgan's annual shareholder letter that around a third of its technology hires across the bank last year didn’t have any banking experience. Beer says that it regularly poaches from Silicon Valley, but admits that investment banks aren’t great at convincing technologists to join them.
“Investment banks have not typically been as good as they could have been at selling the extent of their technology story, which involves working on genuinely innovative projects at the size and scale you rarely see elsewhere,” she says.
J.P. Morgan is also making something of an effort to create the sort of ‘Googleplex’ that appeals to hipster technologists. Its office at 5 Manhattan West in New York, which currently has 700 employees and could more than triple in size, has areas for playing guitar, mini-markets and snooker tables.
Then there’s its technology centre at 4 John Carpenter Street in London, which holds about 1,000 employees. These offices house technologists working on funkier projects around big data and cloud computing across the bank’s various divisions.
J.P. Morgan also has 14 technology ‘hubs’ across the world, which are typically based outside of major financial centres in locations like Dallas, Houston, Mumbai, Glasgow and Bournemouth. Beer says that all J.P. Morgan’s tech teams now work in the sort of “high performance workspaces” that tech pros expect.
“You can write on the walls, change where you sit and who you are working with as needed…we want to create the right environment for technology professionals, which encourages the right balance of the creative and disciplined process needed for managing projects,” she says.
Working with fintech firms
Like most investment banks, J.P. Morgan is also trying work out whether fintech is the enemy at the gates or a potential partner.
More recently, it’s been making efforts to collaborate with fintech firms. For example, its In-Residence program invites fintech firms to work with the bank for six months to solve a problem that could benefit both parties. It has also launched Quorum – an open source platform for blockchain and joined a $30m investment in cloud-based trading communications provider Cloud 9.
Beer says that the problems J.P. Morgan faces when trying to work with fintech firms are regulatory hurdles and finding a start-up that can operate at the scale it requires.
“We process $5 trillion in payments every single day, for example, and it’s very unlikely that a single fintech firm would have the experience of something of that magnitude,” she says.
J.P. Morgan was Beer’s first role in banking. Before joining in 2014, she spent over 10 years in various senior roles at insurance firm WellPoint and was latterly executive vice president of speciality business and information technology.
Now that she has grown up children, Beer has reflected on some the career lessons during her time working in the male-dominated technology industry, and admits that it helps to go in with a clear plan, rather than chasing opportunities.
“Young people going into technology should be mindful of where they want their career to go,” she says. “When I was younger, I moved around the country for different jobs, but I let the opportunities guide me rather than having a clear plan about where I wanted to be. Too often, people look at what’s in front of them without seeing the bigger picture, so I’d encourage longer term goals.”