BlackRock's Rob Goldstein on the Next Megatrends in Finance

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Odd Lots 59 min 9 speakers 4 chapters transcribed 4 months ago
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Stephen Carroll 0:00
Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepke in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now.
Alexis Christophorus 0:27
And from London, I'm looking at what all that means for markets, money and the wider economy.
Stephen Carroll 0:33
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Michelle Hussain 0:54
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Traci Alloway 1:18
Hello and welcome to another episode of the Odd Lots Podcast. I'm Traci Alloway.
Joe Weisenthal 1:22
And I'm Joe Weisenthal.
Traci Alloway 1:23
Joe, when I think about the world of finance and what I would describe as mega trends of recent years and decades, there are definitely two that spring to mind, maybe a third trend, although I don't know if it's mega or not. Probably is. The first is definitely the rise of the buy side. So this idea that it very much used to be all about the banks, and those were the ones that we kind of obsessed over. And then you have this extraordinary growth in the asset management industry. The second megatrend has to be technology, right? Think about the rise of electronic trading, electronic risk management, model-driven risk management.
Joe Weisenthal 1:59
I like this.
Traci Alloway 2:00
And then the third semi-mega trend, I don't know, rise of private markets, right?
Joe Weisenthal 2:04
Yeah. Oh, I have another one. Okay. That I think is legit. The sort of power law domination of a few mega companies and sort of whether it's consolidated.
Traci Alloway 2:14
The big get bigger.
Joe Weisenthal 2:14
The winner take all-ness or the winner take most-ness of the industry. I would add that as a mega trend.
Traci Alloway 2:19
Okay, that's great.
Joe Weisenthal 2:19
And I would say that connects to this episode.
Traci Alloway 2:21
Absolutely. So we have four big slash mega trends and we have the perfect guest to talk about all of those four things. And it comes at a time when obviously we're in this new sort of technological wave with AI. It very much feels like everyone in professional finance wants to figure out a way of being involved in AI in one way or another. It's funny, I was meeting up with someone who works at a very large bank the other day and they were talking about how work that they've done 20 years ago Their managers are now adamant it has to be put into a big Excel database because they're about to shove all of that into an AI model. So you can see there's this urgency. And there's a perennial question over how much of it is real.
Joe Weisenthal 3:03
Random data that exists somewhere, they need to have it as part of a data lake or whatever so that the AI model knows about it. Exactly.
Traci Alloway 3:10
And I think the question for this is how much of it is managers who are latching on to the AI trend versus how much of this is actually going to become productive, useful technology for finance. So we can definitely talk a little bit about that. But we do have the perfect guest. Let's do it. All right. So we're going to be speaking with Rob Goldstein. He is, of course, the COO of BlackRock, someone who has literally lived through basically all of these megatrends that we just described.
Rob Goldstein 3:37
Yes. And the question is, how many hours do we have? You know, needless to say, those megatrends we could talk about for quite some time. Yeah. We could do a series. We could do a series. And one thing I would just politely identify, I think, is people talk about the big getting bigger. Yeah. I think there's an underlying catalyst towards those who could provide a better value proposition are getting bigger. And I think that's the key theme that's happening, particularly with regard to the buy side.

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