Four Principles to Run a ‘Simpler, Smarter, Safer’ Firm amid Digital Disruption
Maintaining a best-in-class operating model is central to the success of any financial services firm. But that’s only part of the picture. A sound strategy, an eye for risk management, and a company’s culture—especially its people—are just as important in the long term.
Ensuring these elements complement each other is key as digitization continues to disrupt the banking world. Disruption is healthy: It gets us out of our comfort zones and makes us very conscious of the competitive landscape, with both fintech and financial services companies looking for a seat at the table. It reminds us that we must continuously innovate and evolve so that we can best support our clients.
The challenge to any financial institution is to drive innovation while delivering on all the day-to-day tasks that keep our businesses running. BNY Mellon processes some $2 trillion of payments each day globally. The firm settled $230 trillion of securities last year and it cleared and settled 88 million transactions with the Federal Reserve.1 Balancing this immense volume of transactions while transforming our business isn’t just challenging; it’s critical to our success.
“To be successful, start with people and look through their lenses. Take your best talent and make them a part of your most significant initiatives so they have ownership of the processes.”
— Lester Owens, Senior Executive VP and Head of Operations
Here’s our approach for delivering transformation to run a simpler, smarter, safer firm:
Focus on the Client Experience Clients are global and digitally savvy; the trends in their personal lives, where they have access to real-time information that’s pushed to them instead of having to go out and retrieve it, influence what they expect of their institutional bank. That’s why we strive to be proactive, anticipate our client’s needs, and provide them with data and insights at the moment they need them – across their entire BNY Mellon portfolio. Digitization means thinking big and broadly.
Choose the Right Technologies Digital technology is at the core of everything we do. In many ways, technology doesn’t just enable the business, it is the business.
Keep the client experience at the heart of your technology discussions. Be aware that clients differ in how they prefer to interact with you, so a one-size-fits-all solution will not always satisfy their requirements. You must develop solutions which are both adaptable and scalable. One example is leveraging natural language processing to capture unstructured instructions from clients without manual intervention. At BNY Mellon, we’re developing a single client-inquiry system that spans all products and incorporates machine learning to predict and proactively address queries.
Emerging technologies are also enabling efficiency across internal operational processes at an exponentially higher rate. Take the automation of the end-to-end reconciliation process, for instance. Machine learning can quickly classify many types of breaks, route them to the appropriate downstream systems, and then through rules-based engines, automatically resolve them, all without human intervention. Technology is a great enabler but in order to drive large scale efficiencies, you must look at the end-to-end process.
Drive a Disciplined Approach By digitizing processes, an organization can become more nimble, much the same way the smallest fintech can. In order to achieve those results you must have internally and externally strong program management, robust governance, and flawless execution skills. Go deep and know the details. Organizations which instill a proper discipline tend to execute more swiftly and with a higher degree of success.
Cultivate a Motivated, Diverse Workplace The secret to developing an empowered workforce that is accountable, highly-skilled, and client-focused goes back to ensuring that you have the right culture. While we’re constantly evaluating its merits, everyone at BNY Mellon is mindful that emerging technology is not a means to an end. What it is, however, is a way to drive innovative solutions for clients.
Just as important is that you need to engage all your partners across the bank and your clients as well. To be successful, start with people and look through their lenses. Take your best talent and make them a part of your most significant initiatives so they have ownership of the processes.
Unlocking Our Potential
Colleagues at the World Economic Forum once said the Fourth Industrial Revolution is characterized “by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”2 Although my mission at BNY Mellon is to drive operational excellence, it’s in keeping with that “fusion of technologies” that this company’s culture and people are at the forefront of our continued transformation.
Know your business and its operations. Understand the end-to-end process from initiation to execution and always seek opportunities to streamline.
Act With Urgency
When colleagues and clients ask me if we should be concerned about the dozens of smart, nimble fintechs that have our industry in their crosshairs, my response is: You bet we should. Act now because tomorrow might be too late.
Think Like a Client
Get to know them as well as you know your own teams. Collaborate with them and deliver meaningful results.
Some of our most valued clients as well as competitors are themselves technologically savvy, global banks. Let’s not forget that they’re watching what we do and how we do it very closely.
Having the most technologically advanced tools in the world won’t amount to much if you don’t empower your best people to learn and leverage them.
No matter how impressive an invention might appear, always, always ask how it may be improved upon as if the success of the entire company depended on it. Because it might.
Work as a Team
It never ceases to amaze me how much we’re able to accomplish in a short period of time when everyone is working collectively towards a common goal.
Challenge the Status Quo
As President Kennedy said: “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard.” I urge my colleagues to come up with “moonshots” of their own with the aim that their ideas have the potential to deliver exceptional results to our clients.
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