Robin Vince, the CEO of The Bank of New York Mellon Corporation (BNY) today shared three “megatrends” he says are not only changing the way the bank works, but is helping them make money.
Speaking at the Goldman Sachs Financial Services Conference in New York, Vince addressed a series of topics ranging from the bank’s financial performance to some of the macro finance trends on which he’s helping BNY to capitalize.
“What are the megatrends that are going on in the world, and how do we make sure that our businesses are able to participate in and adapt to those mega trends?” Vince asked, rhetorically. “I’ll give you some examples.”
The first example Vince gave was the movement from public markets to private markets. In September BNY launched Alts Bridge, a platform that lets investors trade with private equity giants Apollo, Carlyle Group and KKR, among a dozen others. Earlier this year, the bank published a report showing that 74.5% of its traditional and alternative asset managers planned to invest in private equity over the next one to two years. “We’ve been pivoting the franchise associated with that trend,” he said.
Vince’s second example of a megatrend the bank is trying to capitalize on is what he calls the “direct wrapper,” or to put in another way, the medium by which an asset is traded. As technology improves the kinds of assets have evolved from single stocks to mutual funds to exchange traded funds, and most recently to separately managed accounts, similar to mutual funds but where the investor owns the assets directly.
Last month BNY bought managed account firm Archer Holdco for an undisclosed amount. Archer now facilitates $3 trillion for BNY’s Pershing wealth services arm. “We didn’t have all the capabilities there, so we’ve invested,” he said.
Lastly, Vince says the bank is upgrading its operations. In May 2023 BNY appointed Cathinka Wahlstrom as it chief commercial officer. Previously, most BNY businesses had their own Salesforce software, call centers, did their own KYC, most did their own marketing and some had their own HR, he said.
Wahlstrom cut out the redundancies and standardized workflows to make it easier to find new client opportunities. “When a client knocks on the door for one product, you can show them how actually it complements something else,” said Vince. “And so now you can have two sales.”
Though Vince shared few numbers during the chat, he alluded to some recent concerns from chief financial officer Dermot McDonogh, who recently issued guidance that net income interest could potentially be down next quarter. “That’s probably not the case anymore,” said Vince. “We don’t see Nii as a headwind for next year.”
Surprisingly, the megatrends Vince did not mention include artificial intelligence, or digital assets—which have been on a tear.
Last quarter BNY reported earnings per share of $1.50, up 22% year-over-year with a net interest income of just over $1 billion. BNY’s stock is up 51% so far this year to $79, beating the S&P Banks Index, which is up 38% this year.