BNY Mellon's Kumar on Financial Tech Trends, Products (Audio)

tenths of one percent. Down Industrials up sixty eight points, a gain of four tenths of one percent. Nasdaq is up by three tenths of one percent. Ten your up five thirty seconds ZAL there is one point seven oh percent. Gold up sixteen eighty the ounds to twelve sixty three, a gain of one point four percent, and crude oil of eighty three cents of L fifty one nineteen right now on West Texas Intermediate that is a gain of one point seven percent. I'm Charlie Pealoton. That's a Bloomberg

Business Flash. You're listening to taking STI with Kathleen Hayes

and Pim Fox on Bloomberg Radio Technology. It is one of the most powerful forces transforming the financial services industry and a big topic of discussion here at Pershing's Insight sixteen conference at the HIGHERT Regency in Orlando, I had the pleasure today of moderating a panel called Invested in Innovation, and one of those panelists is here with me and Pim Now Swish Kamara, Senior executive vice president as he's chief information officer at b n Y Melon Swirsh, Welcome,

what's great to have you on the show. I just want to start by having you tell our listeners a bit about your background, because it's so interesting. You left India, you come to New York, you staructing your master's in computer science, you start your own company, and then you go to work for Pershing, which was then part of the old d l J. Tell us about about that experience and what you how you became a pioneer of

online brokerage here in the US. Well, you know, we started off as a consultant at the Persian and the Prodigy, which was an online network by Sears and IBM. They were just starting out and before the Internet, before that, long before they Internet, so that was um. So they were looking for a partner to offer brokerage services, and you know, Persian became the participant and I was happy to be there at the beginning of an online brokerage journey.

So from there, you know, we went and offered a similar services on American Online around ninety four, and when the Internet became popular around ninety six, you know, we offered d l J Direct, which is our online brokerage on the Internet. Then you know, we went and did the same in Tokyo, London and Hong Kong. You make it sounds so simple, but not everybody was doing it back then. Yeah. Well, actually, by the time you know, we offered on the internet, you know, we had close

to eight years of experience. So Russian, Why don't you can comment on the desire on the part of let's say more than two thousand investment professionals that are here attending inside. What did they want? What should have registered the destment advisor? What do they need from technology today? Yeah? I think that the question is what do their clients need that the advisors need to you know offer, you know,

to me, the client expectations have dramatically changed. You know, most people have today technology at home that's a lot more efficient than most people have at work. So this notion of you know, people being able to get what they need when they needed something by twenty four uh and and to have something that seems smart and that's able to learn learn about client's needs is you know

what the clients want? So far as successful financial advisors, they need to figure out how to offer that kind of service, leveraging technology so they can scale and they can do it selling twenty four in any device. What does that mean leveraging technology, scaling it in real terms? Give us an example of what how someone then can

take the step up? What would they be doing with it? Yeah, so you know, historically, you know, an advisor may be available you know, Monday through Friday nine f five and if a client needs a conversation, they would make a trip and get the information they need. Um. You know today people clients would probably want that in their smartphone

or you know from home. Sell by twenty four. So the ability to access information when they need to, the ability to communicate, I think it is becoming an important aspect. Is there any negative to that increased volatility? Is there any need really to be so short term oriented. If you are a retail investor, why use this technology If everyone says have a diversified portfolio, what I looked to

the long term? Yeah, I think it's more about convenience rather than being able to do when you have the time, rather than being able to trade sound by twenty four.

You know, for the most part, people looking for advice if they are busy professionals, you know, doing it Monday through Friday, and I'd be the most effective way, you know, so they would like to do it when they have the time on the weekend, and so so be and my melon pushing um Silicon Valley innovation centers where it just seems to me that it's it's tough because, uh, pushing ahead developing a technology great, But you've got a

lot of little fin techs. They've got all kinds of people, you know, pushing and hoping they can disrupt you, right, And it's great to be the disruptor, but it's not so great to be disrupt dead. Um. It's an interesting point.

You know, as a large financial institution, we have lots of capital, you know, we have great financial strength, We have clients, we have phenomenal amount of data about what the clients do, all the things of fintech would love to have UM and the thing that FinTechs have is their passion and and their willingness to try different things UM and to be able to leverage open source software

or cloud computing. So our opportunity is to really figure out not to treat them like as someone who's trying to compete with us, but more to figure out how to take the best practices of fintech as well as to potentially leverage them so that our clients can get the benefit of both. How does financial technology and fintech benefit the smaller asset manager? Well, I think that what

you're going to see. You know, historically, you know, people had this cineo monolithic applications, and you know we're a very long UH sales cycle and and and the cost of making a choice used to be you know, really high.

You and now with a lot of small in a small fin techs and the next and platform that we have, people will be able to pick and choose on a variable cause basis UH dramatically reducing the time it takes to get something done as well as to avoid any major mistakes, So you're going to see more and more people being able to try different things a lot quicker than in the past. What about the threat that all this technology poses to your customers? Here the the advisors,

uh robo advisors, algorithms, artificial intelligence. At some point of it to say, who needs a human being? I could just plug all my data. Maybe you guys would even say, fine, we'll just plug all information in. We'll spit it out to you and you know, forget all these advisors running around. So you know, it's interesting you say that because I used to think like that, that's a upcoming online brokerage. I you know, always thought that tchnologies to answer to

every problem. Uh now with all the experience and maybe a little more money to protect them in the past, I would rather talk to a human being because you know, at the end of the day, there is a lot more to financial advice, you know, than as an allocation in using the technology. Tell us about the cost? How

has that changed? While clearly the cost of transacting for the industry has come down, and you know you're going to see more and more of that even with the likes of blockchain and distribute a ledger so I think there's going to be an opportunity for the industry to remove the friction you know that takes place between transactions between different participants. Um. So certainly I think it will be better for the clients. So the cost of doing

business should keep going down. What is the friction for those of us who do not work at a large financial institution in these transactions? And how will the blockchain which is what the pitcoins based on, or we know we're not talking about pitcos, we're talking about code, a new kind of code. Why is this such a revolutionary thing,

this new this new blockchain. Yeah, you know, when you have a large number of participants trying to get something done, usually you had lots of intermediaries, lots of reconciliation, and you know the end result was things to time to get something done. And obviously, yeah, our cross board of payments are trade, finance, you know, any number of things that we do today. Um, and it's mostly because of that.

You know, things cost money and there are lots of exceptions. Uh, you know, the expectations is a technology like a blockchain and a distributed ledger or dramatically reduced the disagreement that people may have because everyone is looking at the same thing,

for example, a corporate action. And I imagine if you were to have a distribute a ledger of all the securities and the corporate actions in one place and everyone looked at it, it will cost us a lot less, you know, to process, and you can do the same in with the K Y c R A m L. What kinds of workers, what kinds of skills are you looking for specifically to join Pershing? Yeah, I you know, it's a it's a great question. Uh that technology is

changing fast, our client needs are changing enough fast. Um, so clearly we're looking for you know, what we call full stack engineers, people who can do the user experience as well as the back end as well as you know, they need to be more sensitive to what's out there in the marketplace, have a good understanding of what the clients are expecting. So you know, you're kind of looking

at not just a pure technologist anymore. You're also looking for people with some understanding of the clients and the products. Thank you very much for joining us, and thank you for having us here. Suresh Kumar is a senior executive vice president and the chief Information Officer for b n

Y Melant. We are broadcasting live from Pershing's Inside Conference at the Higher Regency Orlando, and this marks eighteen years of insight, eighteen years committed to the success of advisors, and we have over two thousand financial professionals from all over the globe attendant. If you're listening to the Bloomberg Radio