The
BNY's data and analytics unit is more than 20 years old and has more than 800 clients, including asset managers, sovereign wealth funds, insurance companies, broker-dealers and registered investment advisors. It connects them to third-party data sources and provides analytics tools that can be accessed via application programming interface, data feeds or a portal and kept on premise, in the public cloud or in the private cloud through Microsoft Azure.
Although its relationship with Microsoft stretches back for years — for instance, the two companies announced several features in 2020 including one that lets investment managers customize their portfolios to environmental, social and governance factors — the February announcement marks the first joint marketing effort by the two companies to sell the software to clients. BNY will offer its data management clients advanced analytics software from Microsoft that lets them crunch their own data, combine it with external data that BNY already provides for one comprehensive view and analyze it in near-real time, using the latest versions of Microsoft's public and private clouds.
It also signifies a nascent trend among custody banks. J.P. Morgan launched
"It's a competitive space in data management and we're seeing expansion there," said Adler Smith, advisor for capital markets at Datos Insights, noting that custody banks are competing with traditional data management players such as SimCorp and GoldenSource.
Cloud giants are making major investments in generative AI and large language models. Their financial services clients are mostly in test-and-learn mode.
"We've been working closely with Microsoft on our core data management platform for a while, but we thought this was the right time to announce that we are taking these steps beyond that, bringing the latest in technology, cloud and analytics to companies" to help them manage their data, Shah said. "Microsoft doesn't typically do this, going to market with clients as a joint solution."
With this latest version of BNY's data and analytics platform, clients will be able to track the performance of their portfolio and analyze investments according to benchmarks and indices. For instance, a dashboard might show a breakdown of a company's market value and book value, with unrealized gains and losses on a position, and construct pie charts illustrating positions in different currencies.
"Part of our special sauce is we help clients connect and analyze all sorts of data that lets them get a sense of what their absolute returns are," said Shah.
Microsoft has also partnered with the
"The framework of our partnership enables BNY Mellon to take advantage of multiple technologies from Microsoft to develop next-generation data management and software products tailored to the unique needs of capital markets firms," said Karen Del Vescovo, U.S. financial services lead at Microsoft, via email. "We're also actively collaborating on several artificial intelligence capabilities that can be incorporated for improved productivity and better-informed decision making."
Aligning itself with a name like Microsoft could give BNY a competitive edge, said Smith.
"Clients don't tend to easily change who they use for data management solutions," said Glenn Kurban, a partner at Capco.
"We're seeing this buying pattern and behavior with clients more and more," he said. "Even if there is better and more competitive technology available they'll say no, we're a Microsoft shop, or we're a Google shop."
Shah echoes a similar sentiment.
"When we collaborate with Microsoft we make it easier for clients to say 'BNY Mellon has both the knowledge of the data and the best technology, [so] through you, we can access the whole ecosystem,'" said Shah.
