J.P. Morgan Chase is letting clients tap crucial software used by its own trading desks for the first time.
At the heart of the world's biggest investment bank is an all-seeing program that allows its traders and salespeople to value trillions of dollars in stocks, bonds and currencies.
Now, J.P. Morgan is letting clients access the trading program — named Athena after the Greek goddess of wisdom – to run analytics on their own investments, according to Teresa Heitsenrether, the bank's global head of custody and fund services. Her business safeguards almost $25 trillion in assets and is known for winning the industry's biggest-ever deal last year by convincing BlackRock to move $1.3 trillion in assets.
The firm has already sold subscriptions to its Investment Analytics Platform to 208 big investors, Heitsenrether said in an interview. Another 42 clients are expected to sign by year-end.
Banks want to move from hawking individual products to becoming platforms that clients can turn to as one-stop shops for financial services. The shift is necessitated – and enabled by – advances in technology that allow software to replace human-heavy processes. As the world of finance becomes digitized, simple activities like custody become cheaper to provide, and so banks have to offer harder-to-replicate services as part of a bundle to inspire loyalty.
"The value of the traditional business of purely operational services continues to diminish because we're finding better ways to do things with technology," Heitsenrether said. "The battle will be won and lost on, 'Can you give me the right information, analytics and services on top of that?' Becoming a platform is where we see the future."
It's also the latest example of a big financial firm finding commercial applications for software it originally created for its own needs. BlackRock, the world's largest money manager, created a risk analytics program known as Aladdin almost three decades ago. Now Aladdin, sometimes referred to as an X-ray machine for portfolios, helps manage $18 trillion of the planet's financial assets, mostly through licenses to institutional investors.