From my perspective as the Chief Digital Officer for BNY Mellon’s Issuer Services business, I see more than a theoretical benefit to providing seamless access regardless of where, when, and how people work. It’s urgent for the integrity and evolution of our business, and also urgent to meet the needs of clients in a rapidly changing world.
I might not necessarily have anticipated a pandemic as the triggering factor for our business continuity plans. Still, I feel proud of the extent to which our past investments in resiliency, digitization, and automation rose to the challenge when tested by a global crisis. Beyond the obvious shift to virtual collaboration platforms, we had to meet our typical standard of five-nines availability for critical data on cash positions, information on corporate actions, underlying asset documentation, as well as an uninterrupted flow of payments. We successfully navigated the operational turbulence of the pandemic since resilient technology initiatives were always a part of our roadmap.
In fact, the pandemic has increased the urgency of digital transformation projects. I believe debt capital markets will play an even more significant role in the way economies function for both public and private economic activity. A recent data point brought that new role home for me – the OECD recently estimated that the relatively wealthy cadre of 37 OECD countries would take on a total debt of USD17 trillion as a result of the pandemic, not to mention the debt of other nations.
As a result, the pandemic is only strengthening the case and increasing our commitment to technologies that improve our clients’ ability to access, issue, and manage DCM assets, either as issuers or as investors. I firmly believe that smart investments will help us reinforce our market leadership and drive change.
Here are a few examples of what we are doing:
- We continue to invest heavily in tools and platforms that allow clients to access data flexibly. COVID-19 has not lowered our appetite for investing in our NEXEN technology strategy. NEXEN gives clients access to web-based views of essential information about transactions, underlying assets, and supporting documentation. We also provide them with the ability to pull the data we maintain for them into their own information systems. In technical terms, this means we are making data available to clients both via our portal and via APIs.
- We are reimagining loan reporting by enhancing our LoanArc® product to help our CLO clients with portfolio management, middle office, trade settlements, cash reconciliation, and more. Seamless and real-time loan portfolio-level data may become more critical than ever in our new world.
- Machine learning and automation are transforming the way we handle client activity. Just to give a couple of examples, we have automated the routing of client emails for speedier response. We are also adding automation to our payments process (our Corporate Trust business processes over 1.5 million transactions a year), making it faster, more efficient, and better insulated against risks of fraud or error.
The pandemic has also drawn new focus to environmental, social, and governance (ESG) initiatives. Looking ahead to this year’s Earth Day, I wanted to find a way for our digital efforts to complement the climate, or green, agenda.
With these overarching thoughts, we partnered with colleagues across BNY Mellon’s technology and business functions to organize a two-day virtual ‘Green Digi-Tech’ hackathon designed to solve some of the structural bottlenecks we see in the ~$1.2 trillion market in outstanding ‘Climate Aligned’ assets market today.
This approach allowed us to deliver a working prototype as well as a more comprehensive vision for functionality that supports the themes of governance, traceability, and transparency, all core to the needs of green issuers and investors. I believe we accelerated our development by several months as a result – and with a net-zero carbon footprint, too!
The COVID-19 crisis will change our world for the foreseeable future. Markets need to meet dramatically different human and economic needs, and they will function in new ways as a result. We will continue to invest in technology accordingly. We have already invested over USD3 billion bank-wide*.
I wouldn’t want to hazard a guess on the exact characteristics of this new world, even in the short-term, but I’m confident that the way forward will include an unwavering commitment to smarter technology and greater resiliency.
I believe technology investment goes beyond the tools and services that we build. Technology investment and cultural change have to work hand in hand. Cultural transformation within our bank dovetails with changes in global norms and values. People say, “necessity is the mother of invention.” With new and unprecedented necessity, we will continue to pursue industry-leading invention.