Taking The Long View

Armen Avanessians and Goldman Sachs leverage technology and always have.

Armen Avanessians
(Courtesy of Armen Avanessians)

When the University announced last May that SEAS’s Data Science Institute would be transitioning to a University- wide research center, it installed Jeannette Wing as the Armen Avanessians Director of the institute after recruiting her from Microsoft. The benefactor of that directorship, Armen Avanessians (MS’83), heads the Quantitative Investment Strategies (QIS) group at Goldman Sachs. Avanessians, whose father and children also earned Columbia degrees, serves as a University Trustee and heads the Data Sciences Council.

Avanessians is as devoted to the potential of big data analytics as he is to Columbia. The QIS group, which manages over $110 billion in assets, is emblematic of this enthusiasm, employing mathematicians, engineers, and computer and natural scientists. “Goldman has been incorporating innovative technology since at least 1985, scaling analytics across the organization,” Avanessians said. “My group started using natural language processing in 2009, leveraging Professor David Blei’s topic modeling work. Our approach is always to look for what’s economically intuitive and use analytic tools to create a systematic approach to investing.” For instance, the group uses machine learning to identify subtle financial relationships across geographic borders that might shed light on the financial soundness of a company or industry—yielding insights that would have been unattainable without the AI (artificial intelligence) tool.

“We are technically not a fintech company, as the term is typically used, because we’re not a startup,” Avanessians said, “but we incorporate the latest technology, and it’s disruptive. As a Columbia engineer, I recognize that the opportunity set is much, much larger than the $17 billion figure that’s used to describe the current size of the fintech startups.”

As AI techniques, cryptography, blockchain, cloud, and other technologies transform many financial services functions, “the biggest winners are the consumers,” Avanessians said. “Everything will be more efficient. People with assets to invest, those who need loans, homeowners who want to monetize the value of their homes—all will benefit. For a company to be able to flourish, it’s got to be able to adapt to technological advances. But technology doesn’t replace the need for human interaction.”

By Marilyn Harris