Transforming the Client Experience
Three emerging technologies. Four ways they’re transforming the client experience.
Transforming the Client Experience
Three emerging technologies. Four ways they’re transforming the client experience.
March 2020
By Michael Demissie
Over the past several years, BNY Mellon has significantly increased its technology spend. The bank is on a mission to accelerate innovation using technologies like robotics, machine learning and blockchain, as well as to build up robust expertise in deploying these technologies across the firm.1 Our digitization strategy embraces everything from upgrading our existing operating model to building entirely new platforms.
The question is, are these investments paying off in practical applications? And how do clients benefit from these investments?
Each of these three technologies deserves a closer look:
Robotics Process Automation
Bots are ideal for streamlining repetitive, rule-based processes. Today, there are over 300 bots in production at BNY Mellon, and their number keeps growing as they prove their value in new ways. For example, instead of calling our sub-custodians to check trade settlements and tying up resources on both ends of the line, chatbots repeatedly check each other when seeking confirmation that a transaction has settled. Bots do require resources to build, and we are assessing ways to have operations and technology create bots following established design principles which will speed up development and keep more control in the hands of subject matter experts.
Machine Learning
Not every process follows precisely repeatable format that’s easy to automate. That’s where machine learning comes in, helping us identify non-obvious patterns in large data sets to make inferences or forecasts. For example, we are developing a predictive analytics solution to forecast reserve balances for a more efficient deployment of capital. Another form of machine learning, natural language processing, is behind a solution that understands client inquiry emails well enough to either dispatch them to the right team or address them automatically.
Machine learning also plays a key role in strengthening risk management. BNY Mellon is building a machine learning solution to proactively identify unusual transactions and alert clients so that preemptive action can be taken in an effort to limit errors as well as additional fees.
Blockchain
Today, blockchain may represent only a fraction of a firm’s technology stack, but as a foundational infrastructure, we believe it will eventually revolutionize the entire asset lifecycle. At BNY Mellon—an institution with capabilities that encompass transfer agency, subaccounting, fund accounting, custody, and more—we expect its impact on our business to be transformative.
As our clients’ needs grow in areas such as custody of digital assets, so must our capabilities. That is why we are exploring blockchain from both “inside-out” and “outside-in” perspectives. From the outside in, we are tapping into the ground-breaking innovations coming out of the fintech companies working to disrupt the way we do business. From the inside out, we are engaging directly with clients to identify opportunities and reimagine how blockchain and tokenization will reshape the asset lifecycles of the future. At all times, we try to balance visionary possibilities with practical considerations. And we also embrace the value of shared ledgers for tracking assets informed by our extensive experience with the realities of regulation, data residency, and privacy concerns.
How These Three Technologies Are Transforming the Client Experience
All of these emerging capabilities offer great potential for the future. And for BNY Mellon clients, that translates into tangible value in four areas:
Actionable Insights
Advanced analytics help uncover hidden insights that can inform data-driven decisions. For example, we are in the process of implementing a predictive machine learning model to determine likelihood of a settlement failure and proactively inform clients to take action. Similarly, we are enhancing our distribution analytics capability to identify investment product demand within targeted markets. Insights from such capabilities will be invaluable as clients plan product launches and support investment decisions on corresponding advertising campaigns.
Seamless Client Experience
Our clients expect the same level of simplicity, transparency and immediacy when they engage with BNY Mellon as they find in their personal digital experiences. We recognize that the client onboarding process is an area that could benefit from transformation. To that end, we are re-imagining the entire process starting with streamlining information gathering for account set up and simplifying the process, increasing transparency and providing faster access to our products and services. Such transformation can leverage advanced analytics as well as techniques for document understanding to automate processing of client instructions.
Extending our Open Ecosystem
In our pursuit of digitizing our core services, we leverage class leading capabilities available internally or externally through partnerships with innovative companies. BNY Mellon has a robust program where we form alliances with fintech start-ups as well as large companies that are leaders in their respective areas to deliver products and services for our clients.
More importantly, these technologies beckon us to look beyond the walls of our individual enterprises, build industry utilities, address governance and people issues as an industry. For clients, this represents an unprecedented opportunity to play a new role—not as passive purchasers, but as co-creators of a new and better industry.
Solutions for Industry Challenges
Reconciliation is a challenge not only for asset servicers but also asset managers, transfer agents and distributors. BNY Mellon has launched an artificial intelligence-based reconciliation and data control solution aimed at better serving our clients' complex data needs. BNY Mellon has already implemented the solution in our Alternative Investment Services business and we are expanding these capabilities across other lines of business. Clients will be able to access these new capabilities through our portal once development is complete.
As we streamline internal processes like reconciliation within BNY Mellon, we recognize the broader opportunity and plan to extend them to our clients as products they can leverage for their needs.
Today’s emerging technologies hold tremendous promise for the future. At BNY Mellon, we’re working hard to accelerate the integration of three technologies that seem to offer the greatest potential for improving the client experience. And as we digitize our own business, we are here to share our experiences to help you digitize yours.
Questions or Comments?
If you have questions about any of these technologies or would like to hear more detailed use cases, contact Mike Demissie.
1 Solutions under development may not be available immediately in all jurisdictions and, where necessary, may be subject to regulatory approval.
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