Reg tech

JC pontificates about technology An occasional series. →Go uptown Technology Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Any sufficiently advanced technology is indistinguishable from magic.

—Arthur C. Clarke’s Third Law

Why is reg tech so disappointing?

Document assembly has been around for a good 15 years — they thought it was “Lawyer-killing disruptive technology” in 2006 and, well, the cockroaches — we cockroaches — are still here, ladies and gentlemen, and document assembly technology still doesn't work very well.

Why?

For your monitor, sir.

If advanced technology is magic, then “magic” is in the eye of, and measured from the perspective of, the beholder. When the beholder in question inhabits the legal or compliance department the technology doesn’t have to be awfully advanced to seem magical. Especially in a proof of concept. Your salesguy airily drops “blockchain”, “chatbot”, “natural language processing”, “algorithm” and “AI” into his patter and he will sail through.

And so he does.

Aside: If you want to see real AI and really powerful algorithms at work have a look at modern music production software.. The tech is genuinely ground-breaking, the user interface is designed to be run without interference by the user; the expectation is no software-as-a-service because the software is so intuitive you don’t need any service.

• Doesn’t disintermediate: still requires external IT (SAAS, right?), internal IT, management, procurement, a process through which whatever value the concept offered will be bloated, deprecated, rigidised and commoditised to the point where using the tool is a chore. An imposition.
• Doesn’t provide user flexibility: policy will see to that. The product will calcify, it is too hard, requiring too many approvals and too many business cases to develop.
• Doesn’t provide out of the box usable content: to be usable the will require lawyers, and there are generally precious few of those, and they generally are refuseniks and low-cost-location rent-a-seat types who can follow instructions but aren't any good at writing them.

What none of this does is put useful tools in the hands of the user.

• Don't be a rentier: How do I make money off something which is basically a simple idea that doesn’t require a lot of maintenance? The whole point of this tech is it is meant to be labour saving, right? I can’t do it per unit - the whole point is to eliminate the cost of having meatware do manual, repetitive tasks, and — once you have set it up — there is no actual cost to having a machine do it. So trying to act like a rentier is (a) a dick move and (b) is going to get you killed, because your big idea isn’t that flash, and someone will do it, and undercut you. See Roger Martin’s the The Design of Business: Why Design is the Next Competitive Advantage
• Remember the meatware: If you convert your user experience from “answering nuanced legal questions” into “completing a mandatory questionnaire”, you have lost. Document assembly applications: I’m talking to you. You are trying to make humans behave like machines. That is stupid. Humans aren’t good at emulating machines. Humans are better than machines precisely because they aren’t machine-like. If you have reduced your process to a rules-based questionnaire, you don’t need humans at all. Get a machine to do it - hook it up to the trading system directly.