As if having their jobs outsourced to India weren't bad
enough, finance journalists now face a new threat: software programs
that can write stories in less than a second.
Thomson Financial has developed a computerized system
that "reads" earnings releases and produces news articles based
on their contents. What used to be the job of a cub reporter is now
accomplished by a complex algorithm that allows a computer to
digest numbers and describe the changes in text, according to
Andrew Meagher, director of content development at Thomson.
Reuters began automating some aspects of its financial
reporting more than two years ago, but Tom Defoe, head of product
management, news production, says the company has been
cautious in its approach. So far, Reuters uses computers mostly
to scan company announcements for predefined phrases.
Elizabeth Boland, CFO of Bright Horizons Family Solutions,
an operator of child-care centers, says automated reporting
could induce companies to try to fool the reporter bots. "You
may see companies being more artful about wording their
releases or making sure they have positive news in the first paragraph,"
One concern is that the computerized process could
increase volatility, as traders react to the automated reports
ahead of the broader release of earnings news. Since companies
are required to report GAAP earnings first and then back out
extraordinary items, in many cases earnings releases require
close analysis to find the meaningful news.
Meagher says the automated system has a human control.
"If a company is reporting an abnormal item, we hold off on producing
the story until we've talked to an analyst," he says.
Automated financial reporters probably won't render
their human counterparts obsolete just yet. "The computer only
tells you what's happening," admits Meagher. "It doesn't tell