When robots write business news

CFO magazine has an interesting item about how Thomson Financial and Reuters are now both using computers to help write news stories. At Thomson, computers are writing some earnings stories.

The downside, according to one person quoted in the story, is that when companies realize that it’s computers writing the stories about their earnings and not real people, then they might attempt to put things in their earnings releases that they wouldn’t normally get away with if it were a real person.

Kate O’Sullivan wrote, “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,’ she says.

“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.”

“[Thomson director of content development Andrew] 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 you why.'”

Read more here.