- JPMorgan is assembling rapid-response innovation teams inside its investment bank to quickly bring ideas to life and make faster decisions on what projects to pursue- and what should get killed.
- The teams - made up of experts in strategy, product management, data science, engineering and user experience - will be asked to take ideas from paper to prototype in roughly six weeks.
- They're part of JPMorgan's continued effort to accelerate the pace of innovation and surface new ideas from its 256,000 global employees.
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JPMorgan is taking another swing at cracking the innovation code, forming rapid-response teams inside its investment bank to quickly bring ideas to life and make faster decisions on what projects to pursue- and what should get killed.
Under a new program called Area X, the bank is putting together teams of half a dozen employees to take ideas from paper to prototype in roughly six weeks. Each group will have experts in strategy, product management, data science, engineering and user experience, according to Michael Elanjian, head of digital strategy and fintech for the investment bank.
"There's no point capturing good ideas if we lack the ability to implement them," he said in an interview last week. "By building something functional but without all of the bells and whistles, we can quickly, cheaply and more tangibly assess if we want to further invest in the offering, or fail quickly and move on. I want us to spend more time doing product strategy and less time doing PowerPoint strategy."
Elanjian joined JPMorgan just over a year ago from Goldman Sachs to pull together and coordinate a collection of disparate innovation efforts spread across the bank's trading and investment banking unit. He reports to David Hudson and Guy Halamish, co-heads of the 36,000-person strong digital and platform services team. Last November, Elanjian added a line into Max Neukirchen, head of strategy, to better align the work he's doing with the strategies set at the top of the firm.
Elanjian has designed the Area X groups to sit outside traditional reporting structures, but work closely with business units. A team won't begin work on a project until it's gotten buy-in from the business that will manage the product. And once the demo has been built and gotten approval for more resources, the Area X team will hand it back to a larger, more traditional tech team to take it through its next phase of growth. The teams will be based in large offices such as New York, London, and Hong Kong and focus on products that face an employee or client.
Why Area X? The "x" is meant to denote something that spans the entire commercial and investment bank, while the intention of "area" is to summon visions of JPMorgan's global footprint. Each office will have a name befitting its location, so New York will be Area383, for 383 Madison, while London will be Area25, for 25 Bank St.
Elanjian has already started hiring. He declined to say how many people that may be, but a recent job advertisement gives some sense of what JPMorgan is looking for. The bank is hiring for an associate or vice president level software engineer in New York to be "involved in the full development life cycle of analysis, design, implementation, testing and deployment of our platform."
Experience in a startup environment is "desirable," according to the posting, while essential skills involve working with JavaScript, knowing how to use a code library for building user interfaces, and working with what is essentially a track changes program for computer code.
There's no assurance that the Area X program will succeed. Spurring innovation can be difficult to do from inside a 100-year old bank. JPMorgan recently closed down its digital-only banking app, Finn, after some senior executives expressed doubts after the app failed to gain traction with consumers. Goldman Sachs is slowly winding down a once-praised email app it developed in house after realizing third parties could update software more quickly and cheaply.
Area X is one piece of a larger strategy to centralize and inspire more innovation within the largest US bank by assets. Another, an idea competition known as Originate, took place earlier this year. Three teams were selected as finalists and flown to Miami to present to the 350 most senior people in JPMorgan's corporate and investment bank.
The ideas they came up with: a way to securely share know-your-customer information with third parties using blockchain; a plan to use machine learning to analyse 1,000 stocks in five seconds; and an alternative to traditional approaches to client entertainment, with bankers working alongside clients in community service projects. The blockchain project took first place.
And yet another program, named Rapid POC, for proof of concept, is a system to make it easier for tech startups and other third parties to collaborate with JPMorgan. The system will include automated negotiation of non-disclosure agreements, pre-approved data sets that can be used with the startup's product in realtime, and a walled working environment where partners can work with the bank without imperiling its systems.
When completed, the approach should shave the length of time between the first meeting with a potential partner and when the two can start working together to just three days, he said. In total, the time it takes to evaluate potential fintech partners should be reduced from nine months to three weeks, Elanjian said.
See also: INTRODUCING: The 10 people transforming finance
Elanjian, who grew up with an investment banker father and never really thought about getting into anything but finance, is well aware of the challenges facing the industry, and his employer. And yet a poster in his office shows his confidence and sense of humor: designed to look like the opening of the second movie in the original Star Wars trilogy, it has these words in yellow on a black background: "Episode V THE INCUMBENTS STRIKE BACK."
"Scale is a huge advantage," Elanjian said, "but we also have to increase agility and nimbleness. So we've thought a lot about how to leverage scale when it's helpful but not allow it to slow us down. After all, innovation is a means to an end. It's not an end."