…the only real success of deep learning so far has been the ability to map space X to space Y using a continuous geometric transform, given large amounts of human-annotated data. Doing this well is a game-changer for essentially every industry, but it is still a very long way from human-level AI.
To lift some of these limitations and start competing with human brains, we need to move away from straightforward input-to-output mappings, and on to reasoning and abstraction. A likely appropriate substrate for abstract modeling of various situations and concepts is that of computer programs.
Cognitive technologies — applications or machines that perform tasks once requiring human thought — are now cheap enough that banks can deploy them across operations facilitating trades or other capital-markets business. Automating tasks will “free up capacity” for staff to focus on higher-value work, such as research, generating new ideas or tending to clients.
Machine learning — which uses algorithms to identify patterns in large sets of data — can help sales and trading staffs understand positions faster and predict what flows will look like.
Natural language processing can perform legal and regulatory tasks by scanning through records, emails and recordings to translate them into structured data.
Cognitive agents can act as in-house personal assistants or service centers; think of help desks for trading staffs that have issues with their systems.
Robotic process automation — in which machines handle repetitive tasks — is particularly effective in banks’ middle offices, where it can help with end-of-day valuations and extract data.
Smart workflow tools — including document scanning and automated data entry — can speed the process of signing up new clients.
“In continued success, we will deploy increased capital in content, particularly in owned originals, and, as we have said before, we expect to be FCF negative for many years. Since our FCF is driven by our content investment, particularly in self-produced originals, we wanted to provide some additional context on our content accounting at our investor relations website.”
“[Understanding] the actual unit economics in the underlying business…requires analyzing the ‘true’ contribution margin of the business; not simply looking at gross or net revenue and the proper contra-revenue treatment, and not even looking just at gross margin as defined by the company. Many companies embed costs that are truly variable (for instance customer support, marketing, credit card processing) below the gross margin line. If you want to know if the business model truly hunts, you must pay careful attention. Otherwise, you may have simply found a company that is simply selling dollars for $0.85.”
The new program, which follows a similar rollout in Europe, is the latest move by Jeff Bezos to build up a complete catalog, even if Amazon can’t make much money on the products in question. In some cases, Amazon is approaching these third-party merchants after the manufacturer has declined to distribute the products through Amazon.
“When items are unavailable in a particular geography, we provide customers with selection from another marketplace. This offers customers a wider selection of great brands and helps sellers increase sales.”
What Vanguard’s founder, Jack Bogle, and company do have going for them is a unique ownership structure. Fund investors double as the shareholders. This allows Vanguard to essentially operate at cost, spending incremental profit on lower fees.
Vanguard has benefitted from a killer combination in recent years—low cost and quality performance. This is because although the firm distributes ETFs and actively managed funds, they specialize in passive, index-based investing—a style which has surged in popularity amid widespread underperformance across the active manager community.
Investing is a game of probability. Why would anyone want to pay 6x more for a product with a 90% likelihood of being inferior? The average actively managed mutual fund fee is 0.72%—6x higher than Vanguard’s 0.12% annual fee. And roughly 90% of those funds are underperforming Vanguard’s ultra-cheap option.
Ant Financial and Tencent were set to surpass credit card companies like Visa and Mastercard in total global transactions per day in the coming year. The key is that both companies are able to provide payments on the cheap, partly by allowing smaller vendors to make use of a simple printout of a QR code or their phone, instead of an expensive card reader. A back-end system that stores a record of user accounts, instead of having to communicate with a bank, also keeps costs down.
As the country builds its entire consumer economy around two private smartphone payment platforms, it is slowly locking out people unable to get onto those networks, and locking itself into those companies.