BNY Mellon subsidiary aims for 90% straight-through processing

BNY Mellon Pershing, the clearing house subsidiary of the New York-based bank, is leaning on RPA this year as it seeks to boost operational efficiency with increased straight-through processing. “It’s a moving target, but we want to be like 85% to 90% straight through, which means at least 85% of transactions have to go straight through without any human intervention,” said Chief Information Officer Ram Nagappan. “We’re taking a strategic and systemic approach; of course, there’s a lot of robotic process automation.” [caption id="attachment_217567" align="alignright" width="300"] Photographer: Gabriela Bhaskar/Bloomberg[/caption] BNY Mellon Pershing provides business-to-business wealth management, clearing and settlement solutions to clients representing 7 million investor accounts globally, according to the company’s website. Pershing was acquired by the Bank of New York in 2003, which later merged with Mellon Financial Corp. to form BNY Mellon, and has $2 trillion in global client assets. BNY Mellon has an efficiency ratio of 77%, according to BankRegData , which ranks BNY Mellon as having the 10th-highest efficiency ratio of the top 100 U.S. institutions by asset size. An efficiency ratio measures the bank’s operating expenses against its revenue; a lower efficiency ratio means the bank is operating more optimally or with fewer back-office expenses. An efficiency ratio of 50% or less is considered optimal, according to Investopedia. To hit the mark of 85%-90% straight-through processing, Nagappan said Pershing is specifically targeting certain account transfers, like those between institutions, and complex account opening, like those for certain trust and dependent accounts. There are also opportunities with the way in which Pershing moves funds; while some are automated, others remain manual, he noted. Currently Pershing’s straight-through rate is hovering around 70% to 85%, depending on the business process. BNY Mellon Pershing is looking to increase its RPA spend “a little bit” this year, Nagappan said, without disclosing specifics. Pershing is not looking to leverage RPA for everything, he added, noting that system modernization and tactical changes to operational staff will also improve operational efficiency. The company currently uses three different RPA software providers for three different purposes: one specializes in low-code tools, the second is used as an enterprisewide standard, while the third is used in nuanced cases when the enterprise software is “too heavy” for some simple tasks, he said, Nagappan declined to name specific providers. BNY Mellon has already seen some operational efficiency gains via BNY Mellon’s partnership with Google Cloud, announced earlier this month . Pershing is leveraging data and analytics, artificial intelligence and machine learning tech to improve client sentiment analysis, Nagappan said, specifically to help advisors better predict life events, which can lead to cross-selling opportunities. The partnership also allows BNY Mellon to deploy code more quickly while reducing infrastructure costs. Cloud providers, like IBM, Amazon Web Services and Microsoft Azure, have made AI tools more affordable, Nagappan said, as the pricing model charges per usage and on a monthly basis. “It’s a fraction of the price,” he said, adding that five years ago, the cost would be presented as a lump sum at the outset of the project. Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com .

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BNY Mellon subsidiary aims for 90% straight-through processing

Google Cloud partnership and RPA deliver efficiency gains

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