Goldman considers more surveillance; banks seek robotic experts

Receiving Wide Coverage ...

Shaping up
Goldman Sachs is considering a special surveillance program to monitor “higher risk employees in far-flung locations” so it can show regulators and law enforcement agencies that “lessons have been learned” from the 1MDB bribery and embezzlement scandal, in which two former Goldman bankers have been indicted by the U.S. Department of Justice. “Goldman believes it is likely to have to offer up some improvements in a potential settlement with the DOJ, something in addition to existing compliance and staff monitoring operations.”

On Friday, a former Justice employee pleaded guilty to helping funnel $74 million into the U.S. for Jho Low, the Malaysian businessman who is the alleged mastermind of the fraud. Low sought to use the funds to influence the department’s investigation into the fund, according to court documents.

Wall Street Journal

Special skills
Banks and real-estate firms are some of the biggest recruiters of people with expertise in robotics. JPMorgan Chase, for example, “advertised hundreds of job openings tied to robotics” in the 12 months ending in June. “The bank applied robotics to an AI platform it rolled out last year to execute trades across its global equities algorithms business, and is using the technology to help automate other processes.” American Express, which “advertised dozens of jobs with robotics know-how, says one of the areas where it’s using robotics is in automating some customer-service functions, such as credit-card upgrades and the account-balance and reward-point transfers they require.”

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Meanwhile, Amazon is testing its cashierless checkout technology for use in larger stores. "If successful, the strategy would further challenge brick-and-mortar retailers racing to make their businesses more convenient. The systems track what shoppers pick from shelves and charges them automatically when they leave a store. Although the technology functions well in its current small-store format, it is harder to use it in bigger spaces with higher ceilings and more products, meaning it could take time to roll out the systems at more larger stores."

Off the hook
Standard Bank, which faced an indictment three years ago for allegedly failing to prevent bribery, won’t face further prosecution since it met the terms of a deferred prosecution agreement with the U.K.’s Serious Fraud Office. “The satisfactory conclusion of the agreement … signals a milestone for the practice and demonstrates the effectiveness of this type of agreement as a way of altering a company’s culture,” the SFO said.

Financial Times

Growth potential
Santander is looking to add “tens of billions to its assets under management within the next three years” as it pours more resources into its private wealth unit, both in Latin American markets, such as Brazil and Mexico, and in the U.S. and U.K. The Spanish bank has hired around 30 people so far this year as part of the effort.

Manipulating the numbers?
The heads of British banks “are breathing confidence about their balance sheets. But how much capital do these banks really have to burn?” asks Jonathan Ford, the paper’s city editor. “That depends on how you measure it. The ratio that banks favor compares an accounting measure of book equity with the value of their assets, weighted for the amount of risk the lender assumes itself to be taking. [But] one concern with using risk-weighted assets is that bank bosses can influence the calculation by tweaking the asset number.”

Rising concern
Following two days of raids on the bank’s German headquarters, which pushed its stock price to an all-time low, investors in Deutsche Bank “are concerned that the criminal investigation into the suspected money laundering activities of the lender’s wealth management unit will make it harder for chief executive Christian Sewing to execute his crucial turnaround agenda.”

Quotable

“I don’t have any indication of that. We are on track to make our first profit for three years. It is only a matter of time before this progress is reflected in the share price.” — Deutsche Bank CEO Christian Sewing, dismissing speculation about a possible merger with UBS or Commerzbank.