Wall Street's tech transformation, a divide at Google, and the future of healthcare

David Solomon Crains New York

Hello!

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.

Before I go, you can now let us know what you think of our BI Prime stories. Look out for box asking 'How valuable was this story for you?' at the bottom of our stories, and let us know how we're doing. Or contact me directly.

-- Matt

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.

In conversation

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Ray Dalio just unloaded on 'worthless' debt investments he sees headed for disaster - and revealed where you should put your money instead

Ray Dalio, the founder and cochief investment officer of Bridgewater Associates, has shared his thoughts on the late-stage US economy and why, in his view, markets are most likely inching closer to a "paradigm shift."

Tech, Media, Telecoms

There's a deepening divide among Google workers: those who get free meals and those who don't

There's no more free lunch at Google - at least if you're among some of the unlucky engineers who belong to the company's vast workforce of contractors and vendors.

Amazon is hiring for a 'stealth advertising' engineering team to disrupt the $100 billion gaming industry

Amazon has been building up its advertising business to compete with Amazon and Google, and now it wants to expand into the gaming industry.

Investors from Comcast Ventures, Lightspeed, and others name hot media companies they think will blow up this year

It's been bleak for digital media. Headlines blare about fire sales of companies like Mic and Gawker, layoffs at companies like HuffPost and Vice, and consolidation rumors.

Healthcare

Using apps to treat diseases could be the future of healthcare. The first chief digital officer at pharma giant Sanofi told us his strategy for navigating the promises and pitfalls.

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.

Inside Gilead's unusual $5.1 billion partnership with a Belgian biotech, which was codenamed 'Project Eagles' and was sealed the night of a glitzy anniversary party

The night of a big party for the Belgian biotech Galapagos' 20th anniversary, the Gilead exec Andrew Dickinson flew out to the celebration in Europe.

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