BNY Mellon has collaborated with Google Cloud to help improve the US Treasury market settlement and clearance process.
The new initiative will leverage Google Cloud’s data analytics, artificial intelligence (AI) and machine learning technologies to develop new collateral management and liquidity solutions.
As part of the partnership, Google Cloud’s scalable data analytics capabilities will be used to train models on millions of trades to consider every value and factor that could result in a failure.
BNY Mellon explains that it will reduce client risk and create a more efficient financial market with fewer failure points and greater liquidity.
The solution will help clients predict around 40 per cent of settlement failures in Fed-eligible securities with approximately 90 per cent accuracy, which BNY Mellon says will create a more efficient financial market with fewer failure points and greater liquidity.
BNY Mellon will also leverage Google Cloud to support more development environments, to make code delivery fast and reduce infrastructure costs.
Brian Ruane, CEO, BNY Mellon clearance and collateral management, explains that a settlement failure occurs when a buyer and seller fail to exchange cash and securities by the close of business on the scheduled settlement date.
Commenting on the collaboration with Google, Ruane says: “This prediction model could be a game-changer for market participants and is a tremendous showcase of how we are leveraging emerging technologies, such as the public cloud, to accelerate the delivery of meaningful solutions for our clients.”
Rob Enslin, president, Google Cloud, says: “We’re proud to have helped BNY Mellon use our leading data analytics and artificial intelligence technologies to transform the settlement and clearing process, and set an example for the industry overall.”
Last month, BNY Mellon reported a year-over-year (YoY) decrease on its asset servicing revenue.
BNY Mellon said the decrease reflected lower interest rates and higher money market fee waivers, partially offset by higher market values and foreign exchange volumes and volatility.
The bank’s Q4 2020 earnings showed asset servicing revenue totalled $1.4 billion, representing a 4 per cent decrease on 2019’s Q4 figure.
Pershing, issuer services, treasury services, and clearance and collateral management all saw a YoY revenue decrease.
