What BNY Mellon Seeks in a Fintech Partner

BNY Mellon is on the hunt for fintech partnerships related to popular technologies like blockchain, data analytics, and AI, but also those related to more obscure technologies like natural language generation, Lucien Foster, head of digital partnerships at BNY, told Bank Innovation. “We explore all technologies,” Foster said. “We have an AI team, a blockchain team, an RPA (robotic process automation) team, and many more within the bank. But it often makes sense to look outside for technology solutions. That’s where my department comes in.” Part of Foster’s job is to consult with the internal technology teams of each department and to figure out if it makes sense — economically and technology-wise — to seek an external partner. <span style="display: inline !important; float: none; background-color: #ffffff; color: #333333; cursor: text; font-family: Georgia,'Times New Roman','Bitstream Charter',Times,serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: left; text-decoration: none; text-indent: 0px; text-transform: none; -webkit-text-stroke-width: 0px; white-space: normal; word-spacing: 0px;">Those partnerships could be with fintechs, banks, larger technology companies, or even current clients, Foster said. “The businesses are good at articulating their strategy and what their client is looking for,” Foster said. “There are 10,000 startups out there and many more established tech companies. My job is to look internally and externally at the innovation taking place, and matching the two.” Currently, Foster and his team are in search of partners to “fill in product gaps in certain lines of businesses that allow clients to have more control of using and manipulating their data, or something to do with self-service data.” Rule-based automation systems and blockchain initiatives are also in place, he said. In terms of the type of partnerships, Foster said there are strategic and capability-oriented relationships. A capability partnership, he explained, is about filling in gaps for existing products and services. “We have several different themes,” Foster said. “In terms of business solutions, first and foremost, I look at the various business strategies of each department to see if there are any holes that a partnership could fill, or a product or service that it could enhance.” This was the case with Arria NLG, a natural language processing platform. Last week, BNY announced a partnership with Arria through its subsidiary Eagle Investments Systems. The goal of this partnership, Foster said, is to enhance automation by applying advanced natural language generation (NLG) technology. Arria’s technology will allow Eagle to provide its clients with data and insights in near-real time, allowing better automation for internal and external analysis and reporting. Foster said a strategic partnership is a deeper relationship with a third party. “It’s a co-relationship and co-development dynamic in which we leverage our IT and know-how along with the partner’s ability to innovate, and nimbleness," he said. BNY's partnership with Algomi is an example of this type of partnership, Foster said. In October 2017, BNY and HSBC Bank partnered with Algomi, a startup that provides a bond market infrastructure platform for wealth management clients. When considering a strategic partnership, Foster said, "we are looking at their tools, and how we can build products using this company’s tools or platform.” Another example, he said, is BNY’s partnership with FundBlast, a digital communication channel — a chat system between asset managers and intermediaries. Usually, these products are deployed for the client — as in the case of both Algomi and FundBlast – rather than for internal purposes like backend automation such as Arria. Foster said a third type of partnership, investment, is less common than the other two. “We are often asked to make investments in companies,” Foster said. “But we are not a venture fund. We will make investments periodically, but usually, this is for a minority stake in a company that we have a strategic relationship with.” As for BNY’s digital partnership team, Foster is currently hiring buy and sell side technology experts to join the department. Foster’s team currently consists of eight to 10 people and his department falls under a new office that the bank created less than a year ago called BNY Mellon Digital Council. The office was set up in September 2018 and is headed by the Chief Digital Office — a new post that was created to run the council. Currently, the council has about 20 employees and is also hiring for various positions. BNY Mellon has a market capitalization of $49.8 billion. Join us at Bank Innovation Ignite 2019 , March 11-12 at the Hyatt Olive 8 in Seattle. Register here .

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What BNY Mellon Seeks in a Fintech Partner

StoneCastle’s Joshua Siegel Talks Cambr, Which Lets Non-Banks Play Bank

Is Consumer Choice as Much a Factor as Speed in Payments Innovation?

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