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What JPMorgan learned when its traders worked remotely

JPMorgan learned the hard way that it needed to get its traders away from the floor. As detailed by the Wall Street Journal, a managing director on the bank's New York trading floor contracted the virus in early March and came into work. It quickly became apparent that the bank's traders needed to be sent home, or to back-up sites like its office in Basingstoke. Since mid-June, however, the JPMorgan has been easing its traders back into its main offices. As it does so, it's becoming apparent just what's been lost and what somehow needs to be recreated with COVID contingencies in place.

Speaking at a seminar organized by the Systemic Risk Centre in London, Charles Bristow, a managing director in rates trading at JPM said that what's been missing while traders were at home is "incidental information." This is the information that, "you didn't know you needed," explained Bristow.

In a traditional trading floor set-up, incidental information flows freely. "It's when you hear something a corridor away, or when you hear a word that triggers something in your mind," said Bristow. In a remote working situation, this doesn't happen. It's very easy for people to use digital communication when they know the information they need and are trying to elicit, it's much harder to unearth incidental information you're not even aware of. 

As traders return to the office, Bristow said JPM is trying to design its COVID-proofed trading floor with the spread of this kind of incidental information in mind. People who might be able to impart incidental information to particular teams must be located as close by as possible. This is made doubly important by the fact that they are now further apart. - Someone sitting five or 10 desks away is suddenly 40 or 50 feet distant and beyond the "acoustic range." Even when employees are back in the office, incidental information is therefore likely to flow far less freely.

"The queston is who are the hubs that provide the incidental information exchange and how do you scale those hubs to be a team?" said Bristow. Like Citi's Paco Ybarra, he noted too that banks are likely to find that working from home gets harder rather than easier over time. "Time is against us," said Bristow. "The more time drifts, the less people will know each other...The question is how do we maintain the same sense of being a team when people have never been located together."

Like Jim Esposito at Goldman Sachs, Bristow also noted that it's harder to induct and train juniors when you're working remotely. This summer's interns and new analysts will be the first real test of the new system, said Bristow: "If we can't train talent, we won't have a business model for the future." 2020's internships are far more structured than usual, he added: "The usual format of an internship is a lot of rotation, a lot of watching and a lot learning by osbservation. That will not work [under a virtual model.]"

Have a confidential story, tip, or comment you’d like to share? Contact: in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

Photo by Joe Gardner on Unsplash

AUTHORSarah Butcher Global Editor
  • Th
    31 July 2020

    The incidental information may be free flowing in an be-at-office model but the mental cost of micro-registering all the useless information and trying to filter what is helpful is too large to make it worth it.

    Working from home has meant for the first time in years I can finally focus on working my trades, meaningful conversations with clients without being bombarded with low value information. High value information is summarised in my start of day and end of day team calls and the rest of the day I’m getting things done. If I want market updates, i check the Bloomberg/symphony...on my own schedule.

    Unfortunately our finance team will struggle to attribute our outsized PnL in Q2 to this difference but I guarantee you being able to focus is a large factor.

  • Lo
    Long time local
    29 July 2020

    Perhaps it's more of a hybrid model? Do trading desks share a community chat while they are on WFH?

  • Ri
    23 July 2020

    Which just goes to show - just because you CAN work remotely does not mean that it's a permanent solution for everyone.

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