Roman Regelman

Consultant turned securities services legend, Roman Regelman has become synonymous with innovation in the custody industry, spearheading multiple initiatives at BNY Mellon and rising through the ranks to the new role of CEO of securities services and digital. Here he discusses his background, approach to innovation and why he hopes the chief digital officer won’t be a role in the future.
Inducted: 2022

Jonathan Watkins: I saw an article you co-authored back in 2017 – when you worked at BCG – titled ‘Why aren’t banks getting more out of digital?’. How did you take your experience from outside of a banking institution and apply it within BNY Mellon? 

Roman Regelman: We often think of consultants as telling people ‘how to do it’ and ‘what to do’, but you actually observe a lot of things about ‘what not to do’. Of course, you’re not going to advertise that, but I observed people setting up outposts in Silicon Valley and thinking that it could allow them to be a digital bank. I observed clients creating a spin-out and thinking they would have a parallel bank that would be digital and eventually absorb the bank they had.  

I talk about three models – the start-up outfit somewhere to the side, the parallel bank model, and digitising this very bank model – and I tell you, from observation, the only model that works is to digitise what we already have. One process, one product, one mindset. It’s not a trade-off between the new digital capabilities and new digital offerings, you want to build them all at once. 

I’ve learnt that you cannot have digital products but analogue relationships, you have to talk about digital to clients. More importantly, I learnt innovation is necessary, but it needs to sit on a platform that is trusted and robust. So, I was fortunate to see it all. Some of my clients were more successful than others, but that’s always the case.

I came to BNY Mellon with a very clear vision that we have to digitise this very bank, and that’s what we’ve been doing for the last four years, I’ve had amazing support from across the company from Todd and now Robin.  

It’s rewarding to do what you preach. 

JW: You told me last year you had made 36 FinTech investments – where is that number now? – and how has this model of partnership changed BNY Mellon as an asset servicer? 

RR: It’s over 50 now. But it’s not about the number, because any large institutions can make investments in one week. It’s a point about quality, and quality exists on many levels. It needs to be a quality company – which should go without saying – and you have to have a strong use case, because we are a strategic investor, we’re not a financial investor.

The last point is the easiest to describe and harvest to achieve. You really want to have a culture that allows that fintech to thrive and yet maintain this platform of trust. Because the best-case scenario is when a fintech has amazing capabilities which we can use for ourselves, or for our client, or both. We take their innovation, put it together and the client gets a solution.

But I’ve seen people just invest because they want to have some kind of headline, and I’ve seen people invest when they don’t have a culture of doing something like that. 

I’m actually very proud of the results. We’re embedding 90-plus percent of fintechs that made it into our openings. 

We talk a lot about digital assets, as you know, and there are four or five fintechs that are playing a key role in our digital assets offering. 

Yes, we could build stuff ourselves, but they’ve done it and they’ve done it well. They passed our risk process, controls and governance and now it’s really 1 + 1 = 3 and we give them something very important which a purely financial investor cannot – we give them the understanding of how stuff really works, how decisions are made and how clients buy stuff.  

JW: What are you excited for about the industry in the future? 

RR: I think the role of digital and digital assets. It’s now become part and parcel of the industry. It’s not a thing on the side, which it has been for a long time. We have institutional investor clients, we have regulators with many questions in order to get comfortable, we have a market that is global, and in many ways, that magnifies focus on the risk and it needs trusted institutions like us. Then all sorts of stakeholders, clients, employers are looking for digital solutions.  

Even in a B2B industry, at the end of the day, it’s a person who makes the decision, it’s a person who likes to interface. If somebody is really embracing technology in their life, if they’re running things from iPhone, if they’re using the best tools to share information with their friends and family globally, then they’re not going to accept some of the practices the industry has.  

The second thing I’m excited about, which I’ve been thinking about for at least last 20 years, is how the end-to-end value proposition is always better. But I do think that people are recognising that the choice between value end-to-end and best of breed is a false choice. 

It can be orchestrated, integrated, and you can have somebody who drives this data-driven operating model for you and then connect components. You do not need to control the black box to allow somebody to work end-to-end effectively.  

You can work with the central orchestrator; you can work with somebody end-to-end and then plug in best components and the best components sometimes come from the fintechs and sometimes they come from competitors.  

The third thing I’m excited about is that we’re actually getting an amazing inflow of young talent. I would say five years ago, even maybe in the early days of Covid, people said ‘younger people don’t want to work in the banking,’ but I think the kind of banking that we have now is one where people want to work.  

Our digital assets custody team is full of young  – and in many cases, diverse – professionals. These people want to work in a company where everyone values trust. So if you can be trusted and innovative, if you can be robust and vibrant, you’re going to bring talent.  

I recently met with our intern class, and yes, it was just a three-minute presentation by each group, but they had amazing insights. I know our future is secure because of these 50 people I met. 

JW: What are some of the ambitions you have in your new role as CEO of securities services and digital? 

RR: Corporate trust and depositary sales are distinct businesses and I want to apply digital to them as much. We want them to be innovative products, there are some elements of custody in both, so we want to unlock that. 

I really want us to be known for the best platforms in the industry; platforms for fintechs, clients and people, so running that as a distinct business with integrated platforms, that’s a big deal for me.  

I think I told you earlier in my tenure here: one day we’re not going to have a chief digital officer, and that’ll be a really happy day. We’re not there yet, we still need them, but it’s going to be a part and parcel of what we do. Big companies used to have a head of internet strategy – that was a role! Early in the career, there was an ad I put in a newspaper looking for the person with ‘World Wide Web skills’ and I asked them to fax me their resume. 

JW: What’s made a good day for you during your career? 

RR: There are many things but at the end of the day, it just comes to making a true big impact. I think if you ask a typical consultant they’d say, ‘that big project I sold’. In my time as a consultant, it was really about seeing transformation accomplished and stock price increasing.

As an executive, it’s the same thing. When you launch your digital assets offerings, or win something because of our ‘future of custody’ work, that’s winning with an impact for me.