Morning Coffee: JPMorgan’s latest back-to-office plan is a surveillance nightmare. The techies that Deutsche can’t quite bring itself to fire
“As we've returned to more normal patterns in our lives and work, we can all appreciate the many benefits of in-person engagement.” And if you don’t appreciate these benefits, the message from Jamie Dimon is that you should. The official policy for most employees is that you have to be in the office three days a week. And according to a new memo from the Operating Committee, Managing Directors are now expected to lead by example and come in on all five days. Anyone who isn’t meeting the standard is going to be subject to “appropriate performance management steps, which could include corrective action”.
An immediate problem presents itself. It might be thought that JPM could monitor compliance with the policy by just looking at entry cards tapping in and out, like punching the clock at a factory. But of course bankers – and particularly MDs – are often not in the building because they’re working with a client, on a roadshow, at an offsite or (very occasionally) on holiday and/or sick.
And it appears that, despite the huge amounts of money spent on technology across the bank, JPMorgan can’t yet promise that the leave booking system, travel booking system, sick day system and client meeting systems will all communicate automatically with the in-office-policy monitoring system. There is “significant work underway to automate attendance tracking”, but for the time being, business-related out-of-office codes are going to need to be entered manually.
This might not be considered a terrible hardship; there are plenty of lawyers working on the same deals as JPMorgan MDs and filling in timesheets in 15 minute increments. But it seems like it’s a new obligation, and bankers are not always great at filling in forms. Compliance with the actual law is hard enough to achieve in investment banking – compliance with the tracking system for a remote working policy is going to be very difficult to enforce.
Furthermore, policies like this always seem simple when they’re set out in initial memos, but have a habit of generating unanticipated complexity in the real world. If you live in Westchester and have a client meeting in Stamford at 1000 for example, it doesn’t make sense to come into the office beforehand. But if the meeting lasts until 1230 and is followed by lunch, are JPM really going to make you come back to Wall Street to clock in for an hour, for example? Hopefully not. But if it’s established that this sort of thing is a valid exception to the policy, you can bet that some people will take advantage, and some of their colleagues will resent it.
JPM are enacting the policy with the hope of boosting productivity and building the culture, but there’s a real risk that the gains will be eroded by the wasted time and bad feelings generated by having senior bankers spend a proportion of each working week in a low level law enforcement role, reconciling timesheets, finding out which of their colleagues needs to be scolded and listening to the resulting excuses. Personal contact is the sort of thing people have to decide to want on their own; it’s potentially seriously counterproductive to force them to appreciate it.
Elsewhere, Deutsche Bank can finally, after a year of trying, see a future in which it no longer has the serious geopolitical embarrassment of a big technology centre in Russia. A year ago, when Russia first invaded Ukraine, there were about 1,500 employees in Moscow and St Petersburg, and the operation of the “Autobahn” platform pretty much depended on them. By now, that’s down to 500 techies, who are cut off from information from the rest of the bank and employed more or less entirely to transfer knowledge to the people who are going to replace them when they’re made redundant.
That doesn’t mean that Deutsche was able to do without all the actual coders, though – almost half of the original 1,500 staff took up the offer of a transfer to Germany. Deutsche had built the Russian team up over twenty years since 2001 and had even transferred work there from other centres as part of a “nearshoring” project. Although it’s finally been worked out, it’s likely that banks in general will see this as a cautionary tale never to get too dependent on one source of skilled labour.
Meanwhile …
Some major promotions at Goldman Sachs as the equities trading business reorganizes itself for life after Joe Montesano. Dmitri Potishko and Erdit Hoxha will be co-heads of flow derivatives and emerging markets, while Cyril Godeeris will be head of global equity financing. All the new top guys may now find that the traders are looking to them to protect the bonus pool from being redistributed to banking, platforms and other “high quality” divisions that make less money. (FT)
Who polices the police? In the world of short selling, a new research firm has developed a niche franchise by evaluating the quality of other short-sellers’ reports, and publicly castigating the ones that it thinks are flawed, lazy or otherwise not what they seem. As one might expect given the nature of that community, things get pretty nasty pretty quickly, with all sorts of accusations flying around. (Institutional Investor)
LinkedIn is launching a verification service to stop people from impersonating. It hasn’t yet launched any service to stop techbros from claiming to be “former investment bankers” when they spent six months on the analyst program. (WIRED)
Bankers spend a lot of time and effort on financial stress tests, but don’t seem to carry out similar exercises to prepare them for PR disasters, even though an unconvincing public statement or two can seemingly lead to a deposit run. (The Financial Brand)
François-Olivier Mercier, a 13-year veteran at UBS, is going to leave his post as head of European equity syndicate, although he may still be offered another role at the bank. (Financial News)
A “closed loop acoustic stimulation headband” can apparently improve the quality of your sleep and thus make you more productive. Soon the day will come when all bankers have to wear them five days a week or input into the system why they couldn’t. (BPS Digest)
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