BNY Mellon plans new solutions in digital assets and collateral management

The custody bank has launched a new enterprise unit dedicated to digital assets, while a partnership with Google Cloud will see BNY Mellon build collateral management and liquidity solutions on its platform

BNY Mellon will develop new solutions and capabilities for digital assets and collateral management under plans announced this month. 

The custody bank has launched a new enterprise unit dedicated to digital assets, while a partnership with Google Cloud will see BNY Mellon build collateral management and liquidity solutions on its platform.

Its digital assets unit, which will be led by Mike Demissie, head of advanced solutions at BNY Mellon, is developing a client-facing prototype of a multi-asset digital custody and administration platform for traditional and digital assets. The bank expects to launch this later in 2021.

Roman Regelman, chief executive officer of asset servicing and head of digital at BNY Mellon, says increasing client demand for digital assets, maturity of advanced solutions and improving regulatory clarity “present a tremendous opportunity for us to extend our current service offerings to this emerging field”.

Demissie adds: “The digital assets unit plans to deliver a secure infrastructure for transferring, safekeeping and issuing digital assets. Consistent with our open-architecture approach, the unit will leverage BNY Mellon’s digital expertise and leading technologies from fintechs and other collaborators to speed up product development and help our clients tap into the best available solutions in the market.”

‘Helping to transform the US treasury market’

BNY Mellon’s partnership with Google Cloud will leverage data analytics, artificial intelligence (AI) and machine learning technologies to develop new collateral management and liquidity solutions.

The bank says the collaboration is the latest example of its open-architecture approach of working together with leading technology providers to extend its capabilities in reimagining and delivering solutions to meet client needs.

In addition to creating use cases for the US treasury market, BNY Mellon is developing AI-powered solutions for securities lending, liquidity forecasting, dynamic controls for pricing, anomaly detection for transactions, and automated document processing.

Brian Ruane, chief executive officer of BNY Mellon Clearance & Collateral Management, says Google Cloud-built solutions could help clients “predict approximately 40% of settlement failures in Fed-eligible securities with 90% accuracy”.

Ruane continues: “A settlement failure occurs when a buyer and seller fail to exchange cash and securities by the close of business on the scheduled settlement date. This prediction model could be a game-changer for market participants and is a tremendous showcase of how we are leveraging emerging technologies, such as the public cloud, to accelerate the delivery of meaningful solutions for our clients.”

BNY Mellon is using Google Cloud for its scalable data analytics capabilities and to train models on millions of trades to consider every value and factor that could result in a failure. This will help reduce client risk and create a more efficient financial market with fewer failure points and greater liquidity.

The bank is also leveraging Google Cloud to support more development environments, making code delivery quicker while reducing infrastructure costs.

Rob Enslin, president of Google Cloud, says: “BNY Mellon is building on its existing capabilities, using the latest cloud technologies to test and refine its approach to reduce treasury settlement failures, ultimately helping its clients save money and helping transform the US treasury market.”

“We’re proud to have helped BNY Mellon use our leading data analytics and artificial intelligence technologies to transform the settlement and clearing process, and set an example for the industry overall.”

Image: Shutterstock

Mark Dugdale