Written by: Roman Regelman | Senior Executive Vice President, Head of Digital
Since joining BNY Mellon in September 2018, our 50,000 employees have heard me say that we are “Digitizing this Very Bank.” More than a catchy phrase, it’s the name of BNY Mellon’s Digital strategy that we believe will not only make us successful, but will soon be emulated by others in the industry.
At BNY Mellon, we have embraced change for 235 years, having played pivotal roles in forming, and evolving, the banking system in the U.S. and globally. We have the brand, market position, and client base to create the digital enterprise that will help lead our clients through the current times, and beyond.
Digital approaches enable us to become even more relevant to our clients – removing unnecessary complexity and processes to become more nimble and able to rethink how we help our clients deliver and maximize value. We must if we want to be in business for the next 235 years.
Through my career, I’ve observed three models of Digital Transformation, particularly in the financial services industry, where I have spent a great portion of my career:
In the Silicon Valley model you are not working at the core of the business, but rather acting as a fintech to drive innovation and digitize the business. It creates great results and excitement, and generates buzz, but doesn’t change the core.
In the Parallel Bank model you are creating an outpost, which is an entirely new digital bank operating in parallel, with its own separate organization, technology and operations. This unit has the luxury of not dealing with legacy systems. But it won’t have the scale.
So what’s different – and better – about The Digitizing this Very Bank model—the model we have chosen for BNY Mellon? It’s the only model in my mind that delivers true sustainable results—one that is not building something separate, but digitizing everything the firm does.
“Digitizing this Very Bank” is about changing each process, product, and client interaction so they are digital—in line with best standards and client expectations. Not just being better than yesterday, but about being on par with the leading world-class examples—whether as big and global as Amazon, or local and cutting-edge like Go-Jek, a transportation network and logistics disruptor in Southeast Asia.
Our approach is working in a client-centric way, in a cross-functional fashion, using best practice examples from around the world and harvesting the power of our people.
Perhaps you’ve also heard us mention our three Digital Horizons. If not, I’ll clarify them now:
Imagine this: a surfer in Bali, Indonesia, picks up on a trend. Perhaps it’s a new wave (no pun intended) of surfboards or revolutionary kind of wetsuit. In turn, this one surfer has an effect on the valuation of major U.S. companies. Through a combination of the surfer’s, companies’, and world data (such as weather or social sentiment) we can spot trends that our clients can act on.
The sum of our Digital Horizons equals CHANGE. We’re changing the way we work throughout the enterprise.
To get us further toward each horizon we need to embrace the world’s collective intelligence, since a global ecosystem is superior to the individual knowledge of any single company.
We are embracing this collective wisdom in what we call a “culture of partnership.”
When I was a management consultant, I would often hear clients fearfully say “the fintechs are coming!” and “how are we going to fight these disruptive technologies?”
I didn’t view it that way then, and still don’t now. I don’t fear the fintechs. Nor do I fear our competitors.
What I fear is our competitors working with the fintechs before we do.
A very different but equally illustrative example is our strategic alliance with BlackRock, through its BlackRock Solutions business. Here we have come together to offer asset management clients key solutions from BNY Mellon combined with functionality of BlackRock’s Aladdin platform. It’s a 1 + 1 = 3 case in point where all parties benefit.
Our partnerships are about combining the best from the rest of the world – large technology companies, fintechs and even our clients – and combining it with our expertise, breadth and resources.
It is about openness and inclusion.
And it is why we call it building a culture of partnership.
BNY Mellon is not experimenting with AI. We are using it. Because AI is real and it works.
A quick story: At first, Garry Kasparov, Russian Chess Master, was unaccepting of his 1997 defeat against IBM’s “Deep Blue,” a chess playing computer. Later he came to realize the triumphant teamwork of humans and computers. Today a free computer program can beat a world champion chess master, but if you asked that same program to tell you what the difference was between a notepad and an iPad – something a child would understand – it would likely fail.
Together, in many industries, AI plus human intelligence – which I refer to as ‘AI+HI’ – is cutting costs in dramatic fashion, up to half in many instances, and more importantly, it’s cutting processing time by up to two-thirds.
Here are a couple of ways we are using AI+HI – and some debunked myths about AI along the way.
AI has provided human financial advisors with a wealth of data and insights into wealth creation that they in turn can pass along to their clients. It has allowed advisors to enter markets that typically are out of reach for them. It has also enabled standardization, which provides better outcomes for the customer, and reduces the exposure for the advisor by keeping portfolios aligned with stated objectives.
So robo advisors are actually a great example of how the collective intelligence of AI+HI is delivering amazing benefits for human advisors, and for clients.
Those contracts are held with clients, with government agencies, and with vendors – lots and lots of contracts. And these contracts each have lots and lots of pages, where each page in those contracts has lots and lots of unstructured data. Imagine the amount of unstructured data contained in all of those contracts.
Did AI make any lawyers disappear? No. But deploying AI to go through the documents to pull critical information has saved enormous costs and helped lawyers understand key aspects of the contracts, the consistency across contracts, and is helping to assure compliance and provide numerous client benefits.
Digital is not about tinkering with technology or creating an outpost. It’s about trying to apply new thinking that can fully digitize the business.
Most importantly, Digital is about the client experience. Full stop. It’s not about how we’re set up behind the scenes or how we’re organized.
Almost 100 years ago, the scientist Marie Curie said, “the way of progress is neither swift nor easy.” A century later, you may have heard others take a modern day twist by saying, “If you dislike change, you’re going to dislike irrelevance even more.”
Change is a constant, and we’re using it to our advantage – in fact, at BNY Mellon, we’re thriving on it.