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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Now

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Speaker 1: we're going to visit with Carlos Rodriguez. He is the

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Speaker 1: president and the chief chief executive of a d P

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Speaker 1: and just by way of quick background, in August, Bill

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Speaker 1: Ackman's Pershing Square Capital announced that it had taken an

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Speaker 1: eight point three percent steak and since then it has

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Speaker 1: been in a well proxy battle with a DP. In

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Speaker 1: here to tell us more is Carlos Rodrigez. Carlos, thank

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Speaker 1: you very much for being here. Appreciate it. Thank you

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Speaker 1: for having me. All Right, I'm gonna I'm just gonna

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Speaker 1: start you off by um asking you, based on your

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Speaker 1: experience in the job and who you've talked to and

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Speaker 1: your analysis, do you really believe that Bill Ackman wants

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Speaker 1: to make a DP a better company or does he

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Speaker 1: just want to make a lot of money and go away?

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Speaker 1: I think it's probably little bit of both. Uh. There's

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Speaker 1: no question that the business model that he has is

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Speaker 1: really about making a lot of money and eventually going away.

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Speaker 1: But I think he has some uh done a lot

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Speaker 1: of research on the company and certainly has some ideas

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Speaker 1: about how to make the company better. So it's probably

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Speaker 1: a little bit of both. So do you think that

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Speaker 1: he's largely right in his criticisms of a DP. No.

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Speaker 1: I think that, you know, some of his information is outdated. UM.

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Speaker 1: I think as he's done his research, he's probably spoken

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Speaker 1: to some folks that have a perspective of a DP

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Speaker 1: that's probably outdated. He um. As you mentioned that, the

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Speaker 1: first time we heard from Bill was in August, so

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Speaker 1: he hasn't had the benefit of really having a dialogue

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Speaker 1: with the company to understand the things we've been working on.

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Speaker 1: So let's go over what his main criticisms are. He's

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Speaker 1: been saying that a DP has a quote buy not

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Speaker 1: build model, whereas he would like to see a more

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Speaker 1: innovative spirit. Um. He has some other complaints too, among

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Speaker 1: them that board members don't have a big steak in

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Speaker 1: the company like himself. He's saying, I have a better

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Speaker 1: sense of the interest of shareholders. What's your sense, what's

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Speaker 1: your what's your counter to those points? Well, starting with

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Speaker 1: the ownership question, all of our directors have been deferring

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Speaker 1: the cash comp portion of their fees for many years,

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Speaker 1: and some of them have millions of dollars worth of

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Speaker 1: ADP stocks. So it's just not I think it's an

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Speaker 1: accurate depiction of our board, and there's the stake that

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Speaker 1: they have in an ADP. In terms of the innovation point, um,

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Speaker 1: you know, we've we've really been all about innovation over

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Speaker 1: the last six years, and I think that's one of

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Speaker 1: those items where I think we've had an opportunity to

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Speaker 1: have dialogue and communicate with Bill. He probably would have

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Speaker 1: a different perspective because we've been investing in cloud technology

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Speaker 1: over the last six years, We've moved of our clients

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Speaker 1: the new cloud solutions. So I think it's really, I

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Speaker 1: think again outdated information. It's it's just not it's not accurate.

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Speaker 1: What about margins, He's noted that the felt that margins

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Speaker 1: were too low in the business. What's That's an interesting

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Speaker 1: question because we we meet with investors obviously on a

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Speaker 1: regular basis, as you can imagine, and the absolute level

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Speaker 1: of our margins really isn't one of the items that

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Speaker 1: we've heard a lot about up until Bill uh contacted

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Speaker 1: us UM. So we obviously have margin improvement initiative under way.

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Speaker 1: We've actually grown our margins by five basis points over

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Speaker 1: the last uh five years during my tenure, and we

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Speaker 1: have a plan that we've publicly put out there to

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Speaker 1: increase the margins by another five basis points over the

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Speaker 1: next three years. So I think we're focused on margin

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Speaker 1: as Bill is. I think it's really about pace and

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Speaker 1: I think the risk reward ratio of how fast you move.

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Speaker 1: So there have been a lot of public jobs back

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Speaker 1: and forth. I'm wondering on the private side, have you

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Speaker 1: sat down with Bill Ackman explained your point of view

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Speaker 1: and what was that like if so, we have We've

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Speaker 1: had a think professional and cordial conversations. Bill also came,

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Speaker 1: myself and our chairman with Bill, and we've also had

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Speaker 1: a meeting with the full board of directors where Bill

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Speaker 1: came and Uh gave his his the information that he had,

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Speaker 1: the research that he had done, and then his his

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Speaker 1: opinions about where the company should go. So I think

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Speaker 1: the company has been open to dialogue and I think

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Speaker 1: it's been professional and cordial. So he went on television

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Speaker 1: shortly after Bill Ackman announced his steak and called him

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Speaker 1: a used car salesman in a spoiled brat. Your your

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Speaker 1: rhetoric is a lot less inflammatory today. Is there a

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Speaker 1: reason for that? Um? You know, probably time heals all wounds,

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Speaker 1: as they say, So, I think, uh, you know, Bill

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Speaker 1: is a significant shareholder, and we obviously are open to

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Speaker 1: listening to all shareholders. We do disagree obviously with his

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Speaker 1: his perspective on the timing of how fast we should

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Speaker 1: be improving our margins, and we also disagree with the

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Speaker 1: board disagrees with the candidates that he's proposed as as nominees.

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Speaker 1: But you know, we're trying to folk, it's really facts. Now,

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Speaker 1: what's been your main objection to the people he's nominated

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Speaker 1: in his idea? Well, it's not myself, it's really the board,

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Speaker 1: in our nominating governance committee, who interviewed the candidates. And

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Speaker 1: you know, we believe that we have a strong and

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Speaker 1: independent board. We've added, for example, four new members over

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Speaker 1: the last three years, including three with strong technology experience.

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Speaker 1: One of them is Bill Ready, who's the CEO of PayPal.

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Speaker 1: So We've added some really great talent around technology in

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Speaker 1: order to really help us push this innovation movement that

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Speaker 1: we have in the company. And so we think we

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Speaker 1: have a strong independent board that is very capable as

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Speaker 1: a good mixture of tenure and history with the company,

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Speaker 1: but a lot of fresh thinking as well. So I

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Speaker 1: think the committee, the nominee and governance committee just came

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Speaker 1: to the conclusion that there really wasn't any additive value

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Speaker 1: from the three directors that builds proposing. Can you describe

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Speaker 1: what it was like and where you were when you

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Speaker 1: first learned that Pershing Square had an eight point three

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Speaker 1: percent stake in your company. Actually, I do remember that

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Speaker 1: quite well, and I probably will remember it for a

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Speaker 1: long time. I was in my car arriving home about

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Speaker 1: to leave on a on a trip, UH and I

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Speaker 1: was actually leaving a board meeting, and I looked at

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Speaker 1: my my cell phone rang I looked at it, and

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Speaker 1: it said Bill Ackman, And so I entered the phone

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Speaker 1: and Bill and I had again a professional and cordial

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Speaker 1: conversation where he said that he wanted to replace five

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Speaker 1: directors of the company and replace me, and that the

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Speaker 1: company just needed to move faster, and that he wasn't

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Speaker 1: that he had an eight percent stake. He didn't clarify

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Speaker 1: at the time that he had only a two percent

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Speaker 1: stake and the rest was in stock options, which we

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Speaker 1: you know, figured out later down the down the road.

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Speaker 1: But um, you know, obviously immediately called our chairman after that,

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Speaker 1: and then we had a board meeting to discuss the

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Speaker 1: situation and then to talk about next steps. I love

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Speaker 1: the idea of cordially discussing, you know, saying to somebody

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Speaker 1: I'd like to see removed, and cordially saying, well, I

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Speaker 1: disagree with you. I imagine it was quite a quite

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Speaker 1: a conversation. Well, it was, I have to admit of

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Speaker 1: a surreal moment. But you know it's my job to

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Speaker 1: be I think, unemotional, and I think I serve at

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Speaker 1: the pleasure of the board and also at the pleasure

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Speaker 1: of the shareholder. Carlos Rodriguez, thank you so much for

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Speaker 1: joining us. Carlos Rodriguez as President and chief executive officer

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Speaker 1: of a d P, which is based in Roseland, New Jersey. ADP,

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Speaker 1: of course, is very well known for the employment reports

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Speaker 1: that they put out in a regular basis that are

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Speaker 1: used as a gauge of the employment market in the

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Speaker 1: United States. Well, Chinese President j Ping has warned of

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Speaker 1: severe challenges while laying out a roadmap to turn China

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Speaker 1: into a leading global power by twenty fifty. He was

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Speaker 1: speaking at the twice a Decade Party gathering, and uh,

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Speaker 1: we're here to tell us a little bit more about

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Speaker 1: it and maybe some analysis is Bill Rhodes. Bill Rhodes

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Speaker 1: is the author of Banker to the World, Leadership Lessons

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Speaker 1: from the front Lines of Global Finance, and of course

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Speaker 1: he is also the president and chief executive of William

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Speaker 1: Rhodes Global Advisors. Bill Rhodes, thank you very much for

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Speaker 1: spending time with us. Jumping spoke about the Chinese dream.

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Speaker 1: Does the Chinese dream include a nuclear armed North Korea? Well,

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Speaker 1: I think that, uh. As you remember, Pim, I've been

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Speaker 1: saying on your show for the last more than a

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Speaker 1: year that the most important political event of this year

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Speaker 1: was not going to be the elections in Europe, but

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Speaker 1: the nineteenth Party Congress, which, as you mentioned, already started.

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Speaker 1: And this sort of crowns Shi Jin Ping as the

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Speaker 1: leader at least for the next five years, if not longer,

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Speaker 1: because um, if he decides to keep his chief lieutenant

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Speaker 1: once she's shun on the Standing Committee of the Pull

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Speaker 1: Up Burero, and this will be announced at the end

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Speaker 1: of the conference. First of all, how many members will

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Speaker 1: be on the Standing Committee of the Pull Up Buro?

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Speaker 1: Will it be UH seven as you have now, will

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Speaker 1: reduce it to five? And very important whether he'll keep

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Speaker 1: one she's shot because once she's shot is A sixty

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Speaker 1: nine and the informal day to retire among seniors in China.

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Speaker 1: And so if he keeps him on, this man opens

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Speaker 1: the door for U Shijun Pain not only to do

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Speaker 1: this five years UH to UH two thousand twenty two,

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Speaker 1: but opens his door to do another five years, which

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Speaker 1: would be something that has not happened since Dong Joe

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Speaker 1: Pang and Mouse Tom. So it's very critical in this area.

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Speaker 1: I also feel, and as you know, I did an

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Speaker 1: up ed on it came out two days ago, that

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Speaker 1: China is the only one who can basically halt what's

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Speaker 1: going on in UH in Korea with Kim Jong oon

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Speaker 1: and this continuous development of missile technology and matching it

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Speaker 1: with nuclear capability UH nuclear warheads. And the reason the

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Speaker 1: Chinese can do that is they supply almost all the

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Speaker 1: oil and gas, and if they cut that off UH,

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Speaker 1: and they've taken they've said they're going to cut off

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Speaker 1: a little bit, but they need to cut off basically

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Speaker 1: all of it, because then the Chinese, the Chinese will

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Speaker 1: have the ability to stop the Korean armed forces right

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Speaker 1: in their truck. And I think that's what needs to

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Speaker 1: be done. UH. And hopefully with his visit UH that

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Speaker 1: President Trump is going to make UH in the next

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Speaker 1: few weeks to UH China, and he will be the

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Speaker 1: most important person to have arrived in China after the

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Speaker 1: Party Congress, which is by the way, held every five years.

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Speaker 1: So this gives these two the opportunity to try and

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Speaker 1: sort out North Korea because the sanctions so far approved

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Speaker 1: UH at the United Nations won't do it. Bill Um,

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Speaker 1: You're an unbelievably expert negotiator. You have vast experience over

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Speaker 1: decades of negotiating debt deals and other deals across the world.

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Speaker 1: And I'm wondering, can we talk about what we've gleaned

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Speaker 1: from the beginnings anyway of the nineteen National Congress of

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Speaker 1: the Communist Party of China, of what China wants its

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Speaker 1: role to be as a global negotiator and a global

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Speaker 1: force much akin to the US. Well, I think in

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Speaker 1: Asia they want to replace the United States as the

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Speaker 1: leading military political entity. Uh, that's the immediate goal. And

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Speaker 1: as you know, since he took off as five years ago,

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Speaker 1: sheijun Ping has substantially upgraded and continues to upgrade the

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Speaker 1: Chinese military, whether it be the army, the navy, where

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Speaker 1: they particularly upgraded a big time, where the air force,

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Speaker 1: and so he wants to be the dominant power there.

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Speaker 1: And so this is going to be a challenge to

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Speaker 1: the United States. Now what the global uh let's say,

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Speaker 1: aspects of this will be is not are not clear.

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Speaker 1: But I think the real challenge for shijun Ping within

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Speaker 1: economic and financial problems. I mean, the debt has been

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Speaker 1: growing way out of line, the debt to GDP. It's

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Speaker 1: over and uh if he continues at the same page

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Speaker 1: is caused distortions in the economy. I mean, the continuing

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Speaker 1: funding of the of the state owned enterprises. Uh, you know,

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Speaker 1: to a tremendous degree. Uh is not really healthy because

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Speaker 1: a lot of these zombie companies UH in the areas

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Speaker 1: And what Shi Jinping wants to do is to sort

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Speaker 1: of merge the state owned enterprises with some private enterprise

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Speaker 1: to make them stronger, but not really to downsize, and

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Speaker 1: which is necessary. Then you have a bubble in the

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Speaker 1: And at the same time you have a similar situation

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Speaker 1: with the growing debt of the municipalities. Added to all

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Speaker 1: of this, you have a problem with shadow banking, which

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Speaker 1: is now from of total GDP of China, and it's

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Speaker 1: very lightly regulated, if at all. And so all of

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Speaker 1: these things, if they're not dealt with over the next

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Speaker 1: couple of years, could really cause a problem economically and

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Speaker 1: financially in China. And UH and I think slow growth,

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Speaker 1: which as you know, is so important only to China

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Speaker 1: but the world. Well, but Bill, I'm wondering if now

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Speaker 1: that this important meeting this twice a decade meeting is

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Speaker 1: close to being finished. Will China be more aggressive in

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Speaker 1: curbing some of that leverage now that there doesn't have

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Speaker 1: to be sort of a dance up to the up

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Speaker 1: to the meeting. Well, that is my hope and the

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Speaker 1: hope of a lot of China followers is that that

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Speaker 1: that will happen uh starting next year. Now they've taken

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Speaker 1: Banking Commission, the cbr C, and they will have to

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Speaker 1: the People's Bank of China, who is first rate um

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Speaker 1: is Shoa Chuan, because he's already three or four years

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Speaker 1: over his retirement and they'll have to replace him the

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Speaker 1: end of this year and next year. And the the

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Speaker 1: institution that is most respected within China and worldwide is

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Speaker 1: the People's Bank of China. So there are a lot

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Speaker 1: of things that that Shi Jimping has to do. One

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Speaker 1: of the other rumors that's going around and will certainly

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Speaker 1: know that in the next few days, is whether Uh

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Speaker 1: Hi Jumping will keep his premier, who is Likau Chung,

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Speaker 1: And normally the division there is the head of state.

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Speaker 1: Uh looks after the political side has a military under him,

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Speaker 1: but the economic side is driven by the premier, like

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Speaker 1: ago and got China into w t O and changed

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Speaker 1: the whole economy of the world basically not only of China.

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Speaker 1: And there are rumors that that one Shi Shan who

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Speaker 1: might be in that position. We'll know within four or

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Speaker 1: five days. Also as part of this very positive aspect

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Speaker 1: that s. Jimping is putting forward the China Dream, et cetera,

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Speaker 1: they will be announcing uh the third quarter results of

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Speaker 1: their GDP on Thursday, and they'll probably show, if not

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Speaker 1: seven percent, very close to seven percent, So that'll you know,

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Speaker 1: that'll get them off on a on a in a

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Speaker 1: very positive way. But they have to start making these

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Speaker 1: reforms starting next year without a doubt. Bill Rhodes, thank

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Speaker 1: you so much for joining us. As always. Bill Rhodes,

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Speaker 1: President and chief executive officer of William R. Rhodes Global Advisors,

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Speaker 1: also banker for decades, including a long time at City Group.

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Speaker 1: Let's talk about Facebook. There was a story on the

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Speaker 1: Bloomberg today that was fascinating looking at how Facebook and

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Speaker 1: Google helped anti refugee campaigns in swing states ahead of

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Speaker 1: the election in the US last year. Vernon Silver, Projects

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Speaker 1: and Investigations reporter for Bloomberg News authored this piece also

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Speaker 1: here in the studio Shia Oviday Vernon, can you just

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Speaker 1: outline what you found. Basically, what happened is this group

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Speaker 1: which is against h immigration refugees, with all these ads

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Speaker 1: that they wanted to put on the Internet in advance

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Speaker 1: of the elections, targeted key swing states like Nevada and

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Speaker 1: North Carolina. And they didn't just buy the ads. You know,

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Speaker 1: when you think about Russian interference, you think about people

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Speaker 1: who are unknown buying these ads. They went directly to

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Speaker 1: the ad sales people at these companies and work with them.

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Speaker 1: In some cases, the companies, the big two were helping

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Speaker 1: tailor the message for them and even in the case

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Speaker 1: of Facebook in one case using these videos which were

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Speaker 1: you know, making fun of what happens if the Islamic

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Speaker 1: State comes to Paris type of thing, and using them

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Speaker 1: to test their products. What's been the reaction from the companies.

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Speaker 1: You know, they sell ads, that's that's their jobs. It's

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Speaker 1: just money to them. Well, no part of it is

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Speaker 1: they can't be sensors either. And it's really it's a

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Speaker 1: fine it's a fine line. But why you can refuse

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Speaker 1: to accept someone's advertise? Where do you draw the line? Well,

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Speaker 1: I want to bring Shira in here, Shira, I'm wondering

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Speaker 1: what the implications are for Facebook as these new facts

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Speaker 1: emerged that not only did they allow some of these

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Speaker 1: political operatives to advertise, but they helped them hone their

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Speaker 1: message and experimented with the best most attractive social placing.

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Speaker 1: I mean, what's the implication from a regulatory standpoint as

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Speaker 1: well as a business one. Well, look, I think we've

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Speaker 1: clearly seen this year, particularly since the the U. S

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Speaker 1: Election and the presidential election and the fall, that Facebook

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Speaker 1: and Google especially are now under a microscope about everything

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Speaker 1: to do with their business and particularly the power of

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Speaker 1: those two companies to literally influence two billion or more

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Speaker 1: people around the world. Right, And they pitch themselves as

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Speaker 1: we can change people's minds or influence people to buy

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Speaker 1: soda and soft drinks and soda and you know, for trucks,

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Speaker 1: and it turns out they may also be vehicles to

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Speaker 1: you know, turn people against immigrant groups or to help

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Speaker 1: sway elections. In places like Germany. Well, Vernon, I just

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Speaker 1: want to come back to this idea of Okay, where

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Speaker 1: do you draw the line. I mean, you can't advertise cigarettes, right,

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Speaker 1: you can't advertise cigarettes on television. You've got billboards telling

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Speaker 1: people not to smoke. There are a variety of advertisements

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Speaker 1: and a variety of topics that are not permitted in

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Speaker 1: certain venues. What is so difficult If these companies are

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Speaker 1: so smart and they have all this great PhD talent

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Speaker 1: and all these technical wizards, what's so difficult about saying

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Speaker 1: we're going to draw the line of things that are

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Speaker 1: obviously not true and things that are really just designed

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Speaker 1: to incite people rather than to inform them. Those restrictions

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Speaker 1: you just mentioned go back to the point that was

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Speaker 1: just made about regulations. These are things that came from

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Speaker 1: the outside, and that's the risk to them. Well, okay,

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Speaker 1: so political advertising, and this is the issue, right, because

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Speaker 1: at what point do you say, well, this is inciting

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Speaker 1: people versus this is trying to make a point from

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Speaker 1: a political party, Shia. What would happen to say, Facebook's

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Speaker 1: ad sales if there was a regulation saying that they

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Speaker 1: could not help craft or place prominently political ads. We

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Speaker 1: I don't think we really know the answer to that,

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Speaker 1: because Facebook does not disclose of the size of their

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Speaker 1: revenue from political advertisements or kind of political related advertisements. UM.

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Speaker 1: I think the reality is the scale of Facebook. There

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Speaker 1: is no single advertiser, or even no single category that

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Speaker 1: is a you know, seriously material piece of their business.

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Speaker 1: I think Facebook set around the election that political advertising

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Speaker 1: was not a top ten ad category for them. UM.

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Speaker 1: I am also not sure that we're going to see

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Speaker 1: that kind of regulation in the US around political advertising

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Speaker 1: on Facebook or other Internet properties. Everything is a little

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Speaker 1: bit sort of amorphous outrage against Facebook at the moment,

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Speaker 1: but I don't know that I've seen a credible kind

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Speaker 1: of legislative proposal. Yeah. I mean, the interesting thing there is,

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Speaker 1: you know that it's not in the financials but talking

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Speaker 1: to the people on the other end who are placing

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Speaker 1: the ads. In the case of the German far right party,

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Speaker 1: we were talking millions, we were talking hundreds of thousands.

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Speaker 1: This was very small money for a big company like Facebook,

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Speaker 1: and yet this was a campaign that helped a far

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Speaker 1: right party come to power for the first time since

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Speaker 1: the Second World War in Germany. Although you could argue

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Speaker 1: that it is exactly because these small fry operations can

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Speaker 1: have such a huge reach on Facebook that Facebook has

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Speaker 1: attracted the same kind of advertising, the bulk of the

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Speaker 1: advertising that it has. So yes, it's small potatoes in

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Speaker 1: and of itself, but the platform and the opportunity there

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Speaker 1: is really what has attracted so many people. Wonderful story.

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Speaker 1: Thank you very much. Verdon Silver, Projects and investigations reporter

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Speaker 1: for Bloomberg and of course you can follow him on

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Speaker 1: Twitter at v T Silver and our thanks also to

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Speaker 1: Shira Oviday. You can follow Shira, our technology gad flyg

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Speaker 1: columnist at Shira Oviday. This is Bloomberg, all right. We

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Speaker 1: want to get smarter when it comes to what's going

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Speaker 1: on in Wall Street. So we have Hugh Son. He

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Speaker 1: is our finance reporter for Bloomberg News, and you can

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Speaker 1: follow Hugh on Twitter at Hugh Underscore. San s o

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Speaker 1: n Alright, Hugh, you are sort of debuting a three

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Speaker 1: part series that the Bloomberg has put together about automation

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Speaker 1: on Wall Street, and I gotta say I like the

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Speaker 1: title of this one. The upbeat bankers who privately worry

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Speaker 1: about gutting their staff, do they also worry about gutting themselves.

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Speaker 1: I mean, you know, you let them in, and computers

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Speaker 1: they have a way of expanding, don't they. I think, um,

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Speaker 1: I think top management believes that they will be the

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Speaker 1: last to go. Somebody's gonna have to turn off the

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Speaker 1: lights at the end of the captain. Huh yeah, yeah,

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Speaker 1: I mean you still need decision makers at the very top.

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Speaker 1: I think. All right, So tell us about this this

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Speaker 1: uh series and what you got at in in the

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Speaker 1: first of the of the three parts stores. Well, we

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Speaker 1: and everybody else really have been writing about this in

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Speaker 1: piece meal for quite a while now, and I thought, um,

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Speaker 1: we needed to do something a bit more definitive and

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Speaker 1: and so the real thrust of this piece is a

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Speaker 1: data visualization project that shows across asset class, across the job,

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Speaker 1: across Wall Street, hedge funds, banks, everywhere, just the efforts

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Speaker 1: that are being done in machine learning and AI, in

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Speaker 1: different things like a robotic process automation, which is, you know,

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Speaker 1: a simpler form of AI. And the real takeaway for

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Speaker 1: us was that there is no part of the empire

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Speaker 1: that a finance that is completely untouched by this and

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Speaker 1: it's just the beginning. Well, he one thing that struck

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Speaker 1: me is the adoption of computers and artificial intelligence has

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Speaker 1: been largely builled as a way to remove the mundane

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Speaker 1: tasks from humans, giving them more leeway to really be creative.

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Speaker 1: This story really paints a different picture. Can you talk

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Speaker 1: about that well? So that I think the story we're

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Speaker 1: talking about is um it comes from conversations we've had

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Speaker 1: with with executives you say, you know, on background, not

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Speaker 1: not for you can't name me. This is not something

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Speaker 1: that I want taped. But I think this is really

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Speaker 1: gonna this is really going to kill a lot of jobs.

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Speaker 1: And this is on my mind. And so when you

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Speaker 1: think about organizations with hundreds of thousands of people, not

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Speaker 1: every is gonna be not everybody is doing something on

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Speaker 1: a daily basis that is creative that requires um, you know, uh,

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Speaker 1: real abstract thought and creativity. And so what happens when

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Speaker 1: their jobs get automated away? Right? And this is this

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Speaker 1: is gonna have a real human impact. I think of,

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Speaker 1: for example, the introduction of a t M S right

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Speaker 1: automated telemachines and what that did to the banking industry.

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Speaker 1: I recognize that at the time, the headlines were that

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00:24:27,560 --> 00:24:31,280
Speaker 1: there would become there would be no tellers in any bank. Well,

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00:24:31,320 --> 00:24:34,280
Speaker 1: that didn't really come to pass, although it has changed.

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00:24:35,359 --> 00:24:39,119
Speaker 1: I'm wondering, is there the possibility that it will not

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00:24:39,359 --> 00:24:41,600
Speaker 1: happen in this straight line path at many in the

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Speaker 1: industry seat It most certainly won't happen in a straight

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00:24:43,960 --> 00:24:46,560
Speaker 1: lighting path, and most certainly won't happen tomorrow or even

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00:24:46,600 --> 00:24:49,000
Speaker 1: in three years. Um, but it is happening right now.

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00:24:49,160 --> 00:24:51,679
Speaker 1: And and a t M S. That's a good example.

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00:24:51,760 --> 00:24:53,399
Speaker 1: That's something that's added. If you have a t M S,

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00:24:53,440 --> 00:24:56,199
Speaker 1: it's another channel that you get money. Uh. You know,

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00:24:56,840 --> 00:25:00,400
Speaker 1: just because you have um, you know, uh an app

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00:25:00,520 --> 00:25:02,280
Speaker 1: banking app on your phone, doesn't mean that you still

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00:25:02,280 --> 00:25:05,200
Speaker 1: don't need the branch. Um. What we're talking about is

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00:25:05,200 --> 00:25:09,760
Speaker 1: a little different. We're talking about um uh computer programs

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00:25:09,760 --> 00:25:13,639
Speaker 1: that essentially automate the tests of what people do today.

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Speaker 1: I'll give an example. What one example is loan underwriting.

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00:25:17,080 --> 00:25:20,720
Speaker 1: Person does loan underwriting looks at the potential borrower and

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00:25:20,720 --> 00:25:22,800
Speaker 1: sees if they're a good credit risk. Takes hours and

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00:25:22,840 --> 00:25:26,320
Speaker 1: hours and even days. Can a computer do that faster,

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00:25:26,720 --> 00:25:31,479
Speaker 1: cheaper and better? Uh? I think so? So are there

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Speaker 1: any estimates by anyone of how much wall Street head

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00:25:36,960 --> 00:25:40,360
Speaker 1: count could shrink over the next decade or two due

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Speaker 1: to the adoption of artificial intelligence. Another you know, um,

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00:25:44,080 --> 00:25:47,399
Speaker 1: it's a opining about AI is the growth industry. I

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00:25:47,400 --> 00:25:49,880
Speaker 1: mean there's a ton of consultants, uh, you know who

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Speaker 1: put out where people can go for their new employment. Right,

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Speaker 1: that's that's that's somewhere. Yeah, that's somewhere you can um

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Speaker 1: make a name. And and I mean in general, you

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Speaker 1: hear you hear people say thirty percent in five years,

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Speaker 1: and thirty does not seem high when you when you

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Speaker 1: think about the numbers of people who are in the

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Speaker 1: maiden back office doing things which are centrally moving numbers

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Speaker 1: from one screen to another and making sure that the

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00:26:12,000 --> 00:26:16,119
Speaker 1: trains run on time. Staff cuts across Wall Street over

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00:26:16,160 --> 00:26:19,359
Speaker 1: the next five years is what some think is a

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Speaker 1: conservative estimate. Is a number that has come up ballpark

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00:26:23,840 --> 00:26:26,560
Speaker 1: time and again from different from people from the companion

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Speaker 1: to you know, to uh, you know John crying at

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Speaker 1: Deutsche to to consultants. Yes they get that from a computer. Huson.

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Speaker 1: Thank you so much for joining us, and we look

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Speaker 1: forward to reading the next iterations of this series. An

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00:26:41,000 --> 00:26:44,480
Speaker 1: important uh, an important series to really read and consider

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Speaker 1: about Wall Street going forward. Houston is a finance reporter

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00:26:48,240 --> 00:26:51,919
Speaker 1: for Bloomberg, and you can find both the stories and

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00:26:51,960 --> 00:26:54,880
Speaker 1: it's in their graphics, which are really quite compelling. Their

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Speaker 1: interactive and show which areas of finance are most at

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Speaker 1: risk of getting shar on the human side due to computers.

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Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

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00:27:08,320 --> 00:27:12,240
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts, SoundCloud,

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00:27:12,359 --> 00:27:15,800
Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm

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00:27:15,840 --> 00:27:19,399
Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa

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00:27:19,440 --> 00:27:22,560
Speaker 1: abramowits one before the podcast. You can always catch us

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00:27:22,600 --> 00:27:24,200
Speaker 1: worldwide on Bloomberg Radio