BNY Mellon proposes open solution model for asset servicing

BNY Mellon’s CEO and chairman outlined in the global custodian’s annual report that it is pursuing the strategy to meet demands over flexibility and choice.

By Joe Parsons

BNY Mellon has outlined plans to improve the integration of asset services for clients and adopt an ‘open solution’ model that can work with external providers and platforms.

Charlie Scharf, BNY Mellon’s CEO and chairman, outlined in the global custodian’s annual report that it is pursuing the strategy to meet demands over flexibility and choice.

“We are also pursuing ways to simplify and improve the integration of activities from portfolio management to accounting to custody for clients. We believe that our clients will want choice and flexibility as they seek the best solution based on their internal requirements and products,” said Scharf in the report.

He explained the bank is exploring the development of an open solution that combines its services with external partners.

“Their [BNY Mellon’s clients] unique needs require that we provide an open solution that integrates with other platforms. We are actively working with external partners and advancing our own solutions to increase quality, reduce cost and provide more information to our clients to help them drive higher returns.”

The move signals a shift amongst securities services providers that are becoming more agnostic to other custody players in the market, as they look to aggregate and integrate a wider range of data from across the industry.

Scharf added that BNY Mellon is building out its capabilities for higher-growth products such as alternatives and exchange traded funds (ETFs), enhancing real-time intraday reporting and providing data analytics

The custodian plans to spend a further $250 million in technology in 2019, taking its total technology budget to $3 billion, the report showed.

The increase in spend will be directed to “hardware and software for our existing infrastructure and to building additional capabilities,” Scharf added in the report.

“While we are spending more on infrastructure than what I would have hoped, it is not optional. We provide key services to our clients and we are obligated to have the strongest platforms.”

“These investments include the consolidation of its remaining custody platforms, and redesigning its client portal for registered investment advisors (RIA) users of Pershing.

 

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