"Many of those tools are being offered in the form of web-based applications that customers can customize and operate on their own."
Sounds like they are turning what used to be heavily guarded internal software into client-facing apps.
This whole topic is not all that newsworthy. The team within Goldman that had architected and developed this years ago had spun out into a consulting group that essentially reimplemented the same thing in Bank of America (Quartz), JPMorgan (Athena) and many others, now including Morgan Stanley, and even trickling down to smaller banks like PNC.
I consider it one of the biggest ripoffs in modern finance that those organizations have paid untold fortunes to adopt the Goldman-like approach, sometimes even with new or additional proprietary languages brought in on the project. It also adds systemic risk for society because it further correlates these internal banking systems between the largest banks. If something goes systematically wrong with it in one place, there's a comparatively high risk the same sort of thing can or will go wrong in another too.
If we were bearing that risk for a good reason it might be OK. But really we're only bearing it because of the superficial branding of Goldman, and the pressure on banks to hand wave and appear to be doing something in the aftermath of the 2008 crisis. And so they go for what looks politically defensible (e.g. "well, this is what Goldman did and they survived the crash" -- despite it being widely researched and reported that Goldman's position in the crash truly had nothing at all to do with superior risk management systems and was a mixture of political favors and luck) instead of anything sensible from a system design point of view.
F9
I completely agree with the parent and grandparent posts! I worked with one of the SecDB clones for three years at a Too Big To Fail bank, and it was criminally bad (imho). It's snake oil.
I agree with the grandparent post that "Goldman's position in the crash truly had nothing at all to do with superior risk management systems and was a mixture of political favors and luck"
The snake oil in this case is what p4wnc6 (who's spot on) highlighted: "The team within Goldman that had architected and developed this years ago had spun out into a consulting group that essentially reimplemented the same thing" [at other banks].
The product that they sold (a SecDB clone) is pure snake oil, and the projects (which were massively expensive) delivered very little value.
Consider: If SecDB really lives up to the hype, then why would Goldman let all these other banks steal Goldman developers and straight-up copy it?
[1] http://news.efinancialcareers.com/us-en/253040/three-bank-of...
I've wondered what these million dollar per month programmers do on Wall Street. This really puts it in perspective.
On that note, it's completely depressing to see many of the best minds of our time working on shit software that adds nothing to society. Another swath of them are working on getting people to click on ads for Facebook and Google.
Which finances Google's driverless car efforts and an untold other amount of businesses (like gmail). Plus the salaries of thousands of developers and the myriad of other people who work for Google, and the subindustries it supports (bus drivers, chefs, real estate, etc). Just because their specific job isn't world-changing doesn't mean it has no positive effect on the world.
Silicon Valley has benefited greatly from the ad industry which is why the popularity of this type of complaint bothers me.
Same with Goldman. They do contribute to the world by facilitating commerce. Although they likely contribute far less to the world than SV developers since they siphon so much off the top for ultimately marginal longterm ROI. They also ultimately wouldn't make so much money unless they did provide some value to the economy beyond exploitation of byzantine financial systems.
Your claim that Goldman has contributed is a debated topic. Paul Krugman favorably mentioned a study that purports to demonstrate that Wall Street's endeavors are largely unproductive. I can't find it now unfortunately.
https://www.bloomberg.com/view/articles/2016-08-24/are-index...
However, I've read Mike Milken and, despite his warts, I believe he did radically improve capital allocation. So it certainly has happened over the years. -- edit: I meant about Mike Milken
SecDB is still, even with its warts, the leader.
The software is junk software. There's no other secret thing going on -- no misdirection or duplicitous motives. A certain class of high-paying customers responds more to the Goldman brand name -- or at least believes it buys them cache with regulators or investors. For that class of customers, vetting the reliability and quality of the tech stack is at best an afterthought. Since that pile of money exists as a thing for Goldman to target, they do target it.
I advocate that more people should prioritize vetting the technology. If so, they would see it is not of sufficient quality to justify its use, let alone paying to perpetuate it elsewhere. But I'm not naive -- the political approach will always matter more to a wide range of people than will a more objective assessment.
Somewhere along the line CTO's or their juniors with budgeting authority were convinced that Goldman's success was due in some measure to SecDB and Slang, which is pure nonsense.
However, a customer who blindly puts their trading book onto some Goldman application isn't smart enough to do business with Goldman.
As someone who worked at a large bank providing month-end marks for customers (as a 'courtesy'), we knew that we were basically just seeing the stuff we had sold them, and at most half of any other positions they asked for were actually bonds they owned.