BNY Mellon's Pandiri on Real Time Data For Asset Flows (Audio)

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We are at Dove Mountain near Tucson, Arizona, the Ritz Carlton here in the midst of the Tortalita Mountain range. We are broadcasting live it invested sixteen. It's the power of Big Ideas of bn Y Melon client conference. Joining us now is the person who kicked off the conference last night down by the pool with little burning crucibles in the water and a beautiful Arizona evening. And I'm

referring to Samir Pandery. He's executive vice president and global CEO of Assets Servicing at b in why Non Semir, Welcome to Taking Stock and thank you for inviting us to the confidence. Thank you for having us on your program. Uh the uh the challenges that your client's face and of course you goose is an intimate group about two people from across the country and around the world. The big questions what what? What is the biggest one at

the top of the list. When you're looking particularly at UH some of the regulatory changes that have occurred lately, it seems that that no matter whether you're a servicer or a money manager, everybody is still grappling with some of the big changes. Yeah, you know, I think fundamentally, for example, if you're a money manager or if you're a money investor, what you really want to do is

focus on managing money. So that means all of the other things, the operations, the technology, those are things that are not a creative to your core function. So I think what regulation does. It adds responsibilities to your non core activities, and I think that is a huge burden. You know, there's non core activity. Like my job if you're my client, is to make sure that you're invested in the right securities, the right assets, just to save

money and make money exactly. And so if you have to distract or you know, spend part of your time doing other things like worrying about cybersecurity or worrying about your technology architecture or how you're actually um robust. From an operating infrastructure perspective, it's very difficult UM and it's

very expensive. So again, I think one of the things that people are looking for or solutions where they can take advantage of scale, they can take advantage of people that are that can do this in a professional way so that they can really focus on their core business activities. How can the customer also take advantage of all the data that you have? Uh, the idea being that it's no longer playing vanilla investing stocks, bonds, cash, it's everything alternative,

non cord less on. You built a model of yes. So you know, we have a digital ecosystem called Nexon, which is really, i think technologically ten years ahead of where the industry is and really where we're driving the transformation of this company. And the digital ecosystem is based

on a couple of fundamental principles. We collect large amounts of data, so we for example, collect about one point four billion transactions on a daily basis, because the cost of story that data is significantly cheaper now compared to a decade ago. But then the second part, which is really the harder part, is taking the data that is important and relevant and making it consumable in a way that's useful to the client. So again, if I can't take that and translated into a form that's usable, it's

um you know. So that's really the trick and that's the challenge. So give us a specific example of a batch of data compiled over the years by B and Y melon that relates to something that be very specific that before you created these technologies like next in and digital polls, that it was just kind of a lot of data out there, and now you can say, look specifically, here's something someone can learn. What's one example of that. So one example is if you look at our pension universe.

We have about three and a half trillion dollars worth of pension assets that we administer. About a decade ago, three percent of those assets were invested in alternatives. Today that number is two so hedge funds, private equity, real estate.

So as these flows happen into these real assets, you know, clients would like to get that information on real time basis, so we provide them the data on the huge asset flows, the transformations that are happening in real time so that they can actually look at where they are invested relative to their peer group and really decide if that's really what they want to be in terms of the risk spectrum. Uh. And by the way, this was not information that we

were able to provide. Let's say even five to ten years ago. We had the data, but was not consumable. Now I think with the technology you can actually consume that data in real time. You also get the issue of many investors are paying for alpha, but they're really just getting beta. It isn't that kind of also going to be a look into what you're paying for and what you're getting in terms of the holistic universe of investments. Yes.

So one of the things that our data allows. So if you have, for example, as an investor our clients they might be using multiple managers, we can actually show them not only what their manager is delivering in terms of alpha, but what are they delivering relative to their peer group. So it's very clear, very transparent in terms

of what the performances. And again we have a g r S which is called a Global Risk services um business which is really predicated on giving that comparisons so that as an investor you can have a really good, solid foundation to make these comparisons the fintech firms, disruptors, innovators. Is that a threat to be in White Milon and its model or is it an opportunity In some sense, I think it's a threat if we did nothing about it.

We are obviously very very engaged UM and we're also trying to think about how we should perhaps disrupt our own models. So, you know, as an example, we are looking at the use of technology. We're using it the use of robotics, UH in terms of our operational processes to really see if there is a better way to actually um, you know, create the end product you know

that the clients. So robots can really do what I would call the mind numbing things that are you know, task oriented but rule based that you can actually program that you don't need to have a person do, so you can actually have the person focus on the exceptions and the higher value added things that require some kind of a cognitive ability to make a decision and using all of this data. One example I was given this

morning had to do with emerging markets. Investing in a non market correlated fund that specializes in emerging markets looking at capital flows into and out of emerging markets and trying to make a decision to see whether there's a relationship, right, because you've got the emerging market fund, but then you've got the capital flows. What they found was almost counterintuitive. As the flows went into emerging markets, this fund actually

did poorly. Why because everyone was benchmarking against the m s c I and yet the investments were not part of the MSCI index. So this is going to allow not only the investor, but also the people that manage the money to differentiate themselves in a new way. Yeah, I think, you know, the the data is the issue here, right, because you know, when you have metadata that can go at a much deeper level, you can drive analytics that

you actually couldn't do before. So and again I think this is an example where if you actually have data at the most underlying, basic transactional level, where you see the flows going in and out, and if you can digitize that and make that consumable, you will have information that's not aggregated, that's general and non specific. But you

know the contrary. So I think that's really the power of technology and data which is really I think, you know, driving decision making now very differently than even just five ten years ago. What's the challenge for individuals who worked in this industry? You have a very interesting background. You you start out in chemical engineering and got your NBA and finance, and you worked at JP Morgan and you've worked on the trust side at being my Melon. You're

involved with some of the emerging market issues. What is it? What is it? What? What? What do I need to know? What? What is the challenge for for the professional in this industry? Now? I think in UM in my business and I have some of this background. UM. I think there's three things. You know, we are a very global organization. I lived abroad for over a decade UH in Asia and Europe. I think, you know, having that global perspective is absolutely

critical if you want a problem solving this industry. I think the second thing you have to have the ability to deal with change and drive the change in the industry as opposed to letting that happen to you. Having

great change management skills I think are really important. And I think the last thing is you have to be able to disrupt you know, traditional mental models and business models and really come up collaboratively working in different ways with your clients, with your regulators, to solve problems that you couldn't solve before. So again, I think having that sort of open environment in terms of how you solve

problems is going to be really important. So I would say those things are probably really important globality, change management and being able to work with different business models. Thank you very much for spending time with us. Samir pent Deer, he's the executive vice president, chief executive Asset Service. Thing coming up we're gonna be taking a look at the markets with Stavilson our stock Sedator