The mantra of ‘data is the new oil’ may be getting a bit old, but it is truer than ever before. And the ability to access, control and distribute data will be key to a bank’s future, according to Hani Kablawi, chairman of international at BNY Mellon. He sees this through the lens of platform digitisation, which enables better risk management and client experience outcomes.
“Having digitised platforms means that banks are able to quickly transform their own and their clients’ data in a way that can be consumed to make much faster, better-informed decisions,” he explains. BNY Mellon, for example, has moved from being a service provider to being a data provider, both big and small (client) data.
But first BNY Mellon had to ensure its data was of high quality, which meant it spent time on data residency, data accuracy and data tagging, so that any piece of data could be used in multiple ways and could automatically feed different processes, such as reporting. “We call that ‘hydrating the lake appropriately’ – we have a data lake and hydrating the lake appropriately was an important thing to do,” says Mr Kablawi.
The bank accomplished its data transformation through specific use cases. “Our chief data officer [Eric Hirschhorn] refused to ‘boil the ocean’. Instead, he worked with the business to solve for one use case at a time to improve the accuracy and quality of data. He worked with data stewards who are sitting in the business, getting to the eventual outcome that satisfies a particular use case,” Mr Kablawi explains. “We then multiplied that same story thousands of times to end up with a data lake that can solve for multiple use cases.”
As a result, BNY Mellon has created data platforms that could be used internally, as well commercially offered to clients.
For example, the bank, which has $42tn of assets under custody and administration, developed a big data platform called iFlow. “iFlow is a big data monitor of asset movement, geographically and across asset classes, and correlates that with currency movements. Our market strategists use that to comment on the markets. For example, a move out of one country’s equities into another country’s Treasury securities, which also coincided with a movement in the two countries’ currencies,” explains Mr Kablawi. “We touch more than 20% of the world's investable assets, so that’s a nice proxy.”
BNY Mellon’s London innovation centre has a big screen that shows the data flow that the bank delivers to the market. “We have $2tn of assets under management and we are the primary provider of US government securities settlement, with an average of $10tn in US government securities settled every day – it’s a scale business. While previously our business was solely about moving cash and securities around to make them available, now it is also much more about providing this data to our clients so that they can make better decisions much faster than previously,” he explains.
This has piqued the interest of a wider set of client C-suiters, such as chief risk officers, chief financial officers, chief investment officers, heads of marketing, and chief distribution officers who need almost real-time information flow.
On top of the data platform, called Data Vault, the bank also provides front-office support services, as well as support for middle- and back-office activities. “We have built a data platform operating model – an open-architected, front-to-back capability ecosystem that sits on top of the platform, so clients can use us for multiple services, but they can also plug and play platforms from other firms,” he says. “That would have never been possible before we built our data platform that we now provide to our clients.” Aviva Investors in the UK has recently signed up to this solution.
Mr Kablawi believes that those banks who have been slow to automate their workflows and processes, who haven’t been able to keep up with the cloud technologies nor create scalable flexible platforms and systems are going to have an increasingly hard time in future. “I have been saying for a while that the industry is ripe for consolidation, but now it is happening because those who haven’t been able to invest in that way just aren’t able to keep up,” he says.
Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight
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