From Resilience to Reinvention

BNY Mellon Perspectives Article

From Resilience to Reinvention

BNY Mellon Perspectives Article

October 2020

At Sibos 2020, a virtual version of SWIFT’s preeminent annual industry conference, Todd Gibbons, CEO of BNY Mellon, sat down with Microsoft CEO Satya Nadella to discuss how technology is poised to transform financial services in the coming years, how banks can leverage new innovations to drive tangible results and how culture and mission are critical to driving meaningful change.


On the second day of this year’s virtual Sibos, attendees were treated to a “View from the Top” session, in which Todd and Satya discussed how the power of technology is driving transformation in financial services. The conversation spanned numerous topics, from how the pandemic is accelerating digital change to how strategic collaboration will be crucial to the future of the industry.

Digital Acceleration


Satya kicked off proceedings by reflecting on what has been an unusual year. “There's a health crisis, there's an economic crisis and there's social unrest – so there's a lot going on around the world. In this context, businesses have had to really dig deep, so that they first recover and then respond.”


But in these trying times, he explained, digital technology has proven to be a crucial, malleable resource. Satya noted, “We are all using tech to fundamentally build more resilience into our core enterprise, as well as reimagine business continuity. In that respect, financial services is both advanced and challenged.” He explained that although financial services companies have made significant investments in technology, they are always chasing the efficient frontier – and if they lag behind, it can be hard to catch up.


This, for Satya, represents one of the big challenges for the financial services industry. He indicated that, with the pandemic driving the adoption of digital, banks should use this opportunity to push forward and move much more quickly in the technology space. An important thing to get right is how to navigate the new paradigm shifts and technology trends. “If you are building anything new, or even replanting some of the work you have done, you’ve got to be on the cloud, you’ve got to get your data in order and have large scale AI models – the list goes on and on. And it’s exciting.”


The conversation then turned to Todd, who was in broad agreement with Satya – stating that the current environment has certainly made the industry far more resilient than ever before: “It has really reinforced the need to digitize, and is accelerating the trend – not just for BNY Mellon but for everybody in the industry.” Reflecting on how BNY Mellon has held up during the crisis, Todd explained, “In our 236 years, our business model and strategy have shifted over time and, even just in the past few years, they have become much more technology-dependent.” This focus on technology has proven to be critical for BNY Mellon as it has looked to address the impacts of COVID-19, with clients relying on the bank to be extraordinarily resilient and efficient. This, he explained, has been managed flawlessly throughout the pandemic thanks in part to BNY Mellon’s investments in technology.


Culture and Mission


Amid this growing need for adaptability, Satya noted that companies must ask two questions to continually renew and refresh their mission and culture: What is the company’s purpose? And what culture will best drive the company forward?


He discussed how Microsoft has continually stayed close to and updated its mission, explaining that the company was created in 1975 with the notion that they would create some technology so that others could create more technology. And while the technology might have changed, the core identity and purpose of Microsoft have not. Today, Microsoft continues to build technology to be an enabler so that BNY Mellon and other participants at SIBOS can build more technology using their own software applications.


When it comes to company culture, Satya once again turned to Microsoft, explaining that the company relies on a process of listening to and learning from customers – something that should not be taken for granted. “From ancient Greece to modern Silicon Valley, there's only one thing that brings down civilizations and companies: hubris. If you want to be a learning organization, you’ve got to confront the mistakes you make,” he concluded.


Partnerships and Data


As the financial industry looks to unlock this new digital age, Todd noted that strategic collaboration is one of the keys, adding, “Scale has become more critical than ever and clients are recognizing that they need to outsource to take advantage of that scale.” These collaborations go beyond infrastructure, including applications and the management of data.


BNY Mellon is the largest manager of investment data in the world by a significant margin, and the bank is working with Microsoft to harness data in a way in which Todd believes will be game-changing. Using Azure, Microsoft’s cloud computing service, BNY Mellon is providing clients with a range of innovative new products and services. The first is Data Vault, a platform on which clients can consolidate data from many providers, and use AI and machine learning tools to quickly and easily interact with third-party data to gain actionable insights. This, Todd added, “is an amazing starting point, allowing us to alleviate some of the data-management headaches that that our clients have had, while also enriching what they can do with their data. But it also puts us in the wonderful position of being able to build apps driven by the data.”


Another example is Distribution Analytics. This tool takes advantage of machine learning to allow asset managers to see what investors are buying and where they're buying it, which in turn enables them to design and target the distribution of investment products almost in real time – fostering efficiency and bolstering profits. In addition, BNY Mellon has also developed a new ESG data analytics app that uses artificial intelligence to customize investment portfolios to individual ESG preferences with support from multiple third-party data sources, including crowdsourced ESG data.


“Client expectations around reliability, transparency and the client experience are much higher than they used to be,” Todd commented. “If we look at machine learning and some of the other things we’ve been collaborating on with Microsoft, it’s not only helping us become more efficient, it’s enabling solutions that we wouldn’t have even imagined just a few years ago.”


Todd added that he views such collaborations in this new world as extremely important. “When two firms come together – as we have done with Microsoft – and we are able to merge technology, engineering capabilities and deep subject matter expertise, it is amazing what we can learn from each other and what we can do for our clients. We shouldn’t kid ourselves that anybody can be all things to all people. So I think one of the things we're going to continue to see is more partnering and more merging of expertise.”


Looking to the Future


So what does the future hold? While we are definitely not going to go back to the way the world was before, we are also not going to remain as it is today. Satya believes that when we emerge on the other side of the pandemic, there will be a greater understanding of what truly drives productivity. For Satya, the keyword is flexibility, adding that one important lesson is that there is no place for dogma of any form. “The concept that everybody needs to be in the workplace or everybody needs to work remotely is probably not going to work. We will need to have more flexibility and some of these digital tools look likely to give us that.” The solution, therefore, will be one that takes the best of the two worlds and blends them appropriately.


Satya concluded by emphasizing the importance of reinforcing mission and culture – which, at Microsoft, means a willingness to be a learn-it-all instead of a know-it-all. “Every person in the organization that has to have that commitment. I think this growth mindset speaks to everybody. It is about becoming a better human being, a better parent, a better partner, a better co-worker, a better friend.” That continuous drive for growth is essential in an environment that requires continuous transformation.


This piece is an edited excerpt of a SIBOS “View from the Top” panel, held on October 6th, between BNY Mellon’s Todd Gibbons and Microsoft’s Satya Nadella. You can view this panel, as well as the full back catalogue of SIBOS panels, by registering for SIBOS here.


BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/ or its various subsidiaries generally. This material does not constitute a recommendation by BNY Mellon of any kind. The information herein is not intended to provide tax, legal, investment, accounting, financial or other professional advice on any matter, and should not be used or relied upon as such. The views expressed within this material are those of the contributors and not necessarily those of BNY Mellon. BNY Mellon has not independently verified the information contained in this material and makes no representation as to the accuracy, completeness, timeliness, merchantability or fitness for a specific purpose of the information provided in this material. BNY Mellon assumes no direct or consequential liability for any errors in or reliance upon this material. BNY Mellon will not be responsible for updating any information contained within this material and opinions and information contained herein are subject to change without notice.


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