BNY Mellon has been the financial services industry pioneer for over two centuries since its inception in 1784. Over the decades, the bank has embraced digital innovation to propel itself into the future. With its primary focus on digitalization through cutting-edge technology, The Bank of New York has contributed to the current strength of the economy through investments in various blockchain technologies, digital assets, artificial intelligence, and cybersecurity, among others. Established in the year 2000, BNY Mellon Technology Private Limited, a subsidiary of BNY Mellon, operates in India and works towards providing leading technology solutions to the bank. The bank has over 13,000 professionals who work across nine innovation centres globally and assist in empowering the bank worldwide.
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| Source: Google Images (2019) |
Blockchain and Digital Assets
In August 2021, the global market capitalization of cryptocurrencies was a rough $2 trillion, which was more than twice the level at the end of 2020. This data indicates that in just a decade, the crypto market reached approximately 20% of the global market capitalization of gold. A global survey of institutional asset managers and hedge funds indicate that over 270 buy side institutional investors hold 41% of cryptocurrency in their portfolios with an additional 15% planning to hold digital assets in the near future. BNY Mellon's significant investment in blockchain technology and digital assets is aimed at exploring potential use cases for the technology in the financial services industry while creating its own digital assets solutions. The company has provided custodial services for Bitcoin and other cryptocurrencies and has invested in these currencies.
Artificial Intelligence and Customer Service
The company is adopting digitalization in investment services, using AI and process automation to increase efficiency, and robotic process automation to enhance the client experience. With all the traditional and digital assets in one place, pioneering in technology and institutional grade risk management processes built in one infrastructure, BNY is positioned to provide the best customer services. BNY Mellon's investment in artificial intelligence (AI) and machine learning has led to improvement of the efficiency of its operations and customer service. The company uses AI to automate back-office processes, cut costs, and increase efficiency. BNY Mellon has also captured headlines recently for exploring natural language processing and chatbots to improve customer service and interaction.
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| Source: BNY Mellon (2022) |
Future-Proofing with Investment in Digital Technologies
With over $2 trillion in payments cleared and settled everyday, BNY Mellon also hold the title of being the sole settlement agent for U.S. government securities. BNY Mellon is actively developing new digital products and services to meet the changing needs of its clients, such as its digital asset custody solution. BNY Mellon uses natural language processing to identify the intent of client inquiry emails and machine learning to classify and understand incoming trade instructions.
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| Source: BNY Mellon (2022) |
Moreover, BNY Mellon is exploring blockchain technology's potential to eliminate unnecessary or duplicative processes, reduce costs, and improve efficiency, transparency, and resilience. APIs are the foundation of the client experience, enabling institutional investors to receive data in their preferred format, while open architecture defines the future-state operating model.
In conclusion, BNY Mellon's digitization efforts reflect the company's unwavering commitment to innovation and technology. By investing in blockchain technology, artificial intelligence, and cybersecurity, and creating new digital products and services, BNY Mellon is positioning itself as a pioneer in the financial services industry's digital transformation.
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