Bank of New York Mellon, the 232-year-old custodian bank, is keen to work with fintechs in India. Brian Shea, vice-chairman, BNY Mellon and CEO, investment services, says India is leading the bank's initiative in transforming itself and helping other financial institutes in adapting to the technology change. In an interview with Shivani Shinde Nadhe, Shea and Suresh Kumar, global CIO, BNY Mellon and iNautix, talk about the technology disruption in the industry, its eight innovation hubs and India leading the disruption. Excerpts:
How significant is the impact of technology on banking and financial institutes?
Shea: We are living through this historic period of change. Next month marks the eighth anniversary of the peak of the financial crisis. And we are still living it... thankfully the Indian economy is growing well, leading the world in many respects, but in many parts of the world where our clients are they are facing lower economic growth rate, we are dealing with very low or negative interest rates, we are dealing with the most historic period of global regulatory reform and regulatory change. There is political change going on, the most recent being Brexit, which has impact on banking and financial institutes around the world. And then there is the technological change, digitisation of everything. We are seizing all that. Now, this change which can be a challenge can also be a huge growth opportunity.
Shea: When your core growth rate is pressured by all those forces, financial institutions are compelled to transform. We are leading our own business improvement process. The whole idea is to become more productive and efficient with the resources we have, to be able to fund the entire regulatory change that is happening and invest in strategic growth areas and reward shareholders. We have been able to make significant progress on our business improvement plans.
Kumar: There are a lot of inefficiencies in the way financial institutions operate. We want to make a platform that enables to offer services that people can consume in a seamless way. For this we have developed Nexen, our digital platform. We've been working on this since 2013 and we have been working on various components which include hybrid cloud, APIs, big data and an app store. We've in-sourced a lot of our application and built it inside. We just had a hackathon a few days back and over 500 people participated from India. We spend about $2.1 billion annually on IT.
How significant is the impact of technology on banking and financial institutes?
Shea: We are living through this historic period of change. Next month marks the eighth anniversary of the peak of the financial crisis. And we are still living it... thankfully the Indian economy is growing well, leading the world in many respects, but in many parts of the world where our clients are they are facing lower economic growth rate, we are dealing with very low or negative interest rates, we are dealing with the most historic period of global regulatory reform and regulatory change. There is political change going on, the most recent being Brexit, which has impact on banking and financial institutes around the world. And then there is the technological change, digitisation of everything. We are seizing all that. Now, this change which can be a challenge can also be a huge growth opportunity.
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How is BNY Mellon dealing with this disruption?
Shea: When your core growth rate is pressured by all those forces, financial institutions are compelled to transform. We are leading our own business improvement process. The whole idea is to become more productive and efficient with the resources we have, to be able to fund the entire regulatory change that is happening and invest in strategic growth areas and reward shareholders. We have been able to make significant progress on our business improvement plans.
Kumar: There are a lot of inefficiencies in the way financial institutions operate. We want to make a platform that enables to offer services that people can consume in a seamless way. For this we have developed Nexen, our digital platform. We've been working on this since 2013 and we have been working on various components which include hybrid cloud, APIs, big data and an app store. We've in-sourced a lot of our application and built it inside. We just had a hackathon a few days back and over 500 people participated from India. We spend about $2.1 billion annually on IT.