Bank of New York Mellon told investors Thursday it’s using robotics to help cut costs and shift workers to more fulfilling tasks.
Yes, you read correctly.
The bank didn't mean robots with mechanical arms installing a carburetor on a Detroit assembly line. Neither was it talking about the robo-advisers adopted by wealth management firms. Instead, it was referring to
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Bank of New York Mellon, Northern Trust and State Street have all pledged to cut costs as challenging global equity markets, low interest rates, a strengthening U.S dollar and heightened regulatory expectations continue to crimp revenue and profit margins.
January 28 -
Virun Rampersad, the guy in charge of global innovation for the 230-year-old BNY Mellon, is more banker than technologist, and it shows in his strategy. His job is to create a culture that'll keep this banking behemoth relevant for centuries to come.
November 2 -
A new wave of artificial intelligence applications work by crunching financial data to answer customers' questions. This may give financial institutions a leg up over their nonbank competitors, since the latter group tends to lack vast reserves of people's financial information.
May 13
"We've been piloting robotics and machine learning processes to automate work and eliminate repetitive manual tasks," BNY Mellon Chief Executive Gerald Hassell said in his opening remarks on the bank's second-quarter earnings call Thursday.
He stressed that the project is in its "early stages."
"It's really taking some of the manual mind-numbing exercises out of the process and doing it at a lower cost," Hassell said.
The bank has "30 bots in production right now across six different processes," he said.
Broadly, the bank has been stressing tech-related innovation in recent months. Its head of global innovation has been tasked with getting BNY Mellon's employees to
"Over the past two years they've made a concentrated effort to invest in technology," said Ashley Serrao, an analyst at Credit Suisse. "So far, they've been focused on streamlining their number of platforms."
The robotics project will "automate and enhance time-consuming, repetitive tasks," such as account closures, settlements and mutual fund balancing, said Kevin Heine, a bank spokesman.
"It's also designed to help employees be freed from manual work and focus more on value-added tasks, and should produce faster service for clients and improved accuracy and consistency," Heine said.
The project is primarily focused on BNY Mellon's investment services division, which encompasses custody services, broker-dealer services, global collateral services and depository receipt and clearing services. Heine said. It's the bank's largest business segment, with $1.8 billion of revenue in the second quarter.
Hassell also said during the conference call that BNY Mellon is looking to reduce its number of terminals and consolidate market data feeds to help cut costs.
Serrao said he doesn't have enough information to make a guess as to how much BNY Mellon might generate in yearly cost savings from automation.
BNY Mellon has not disclosed any figures on the projected savings or how much it's spending on the initiative, Heine said.
"We are always assessing the latest technologies to explore how we can best serve our clients," Heine said. "The robotics efforts are a great example of that."
