This content first appeared in the June 2024 Fintech newsletter. If you’d like more commentary and analysis about news and trends from the a16z Fintech team, you can subscribe here.
Founded in 1784, BNY — formerly known as BNY Mellon — is the country’s oldest bank and no stranger to change. But according to Akash Shah, the banking and financial service provider’s Chief Growth Officer and Global Head of Growth Ventures, the corporation is currently undergoing a particularly rapid shift in how it aims to realize the full potential of its capabilities, reach, and people – and he’s energized by the progress.
“What excites me most is that the combination of our own ambition and the rapid growth of the capital markets — new individual investors, new asset classes, new markets entering the global economy — are great short- and long-term catalysts for our growth,” he says.
BNY, which held over $47 trillion in assets under custody and/or administration, as well as $2 trillion in assets under management as of 2023, welcomed Shah in 2018 as Head of Strategy. Currently, among other duties, he’s focused on innovating new client product offerings and managing BNY’s software and data management business.
“Great software companies should provide investment solutions in virtually every client interaction, and the great investment managers of the future will need software to structure, distribute, and manage their assets,” he says. “That is who we are today, and who we want to be even more of, in the future.”
We recently asked Shah about BNY’s approach to adopting AI, challenges that lie ahead, and what advice he would give to fintech startup founders.
Below is an edited excerpt from our conversation.
a16z: How is BNY adopting AI, and where has it been most impactful so far?
Akash Shah: AI is especially powerful when it’s used to solve our clients’ most complex problems: the ones that involve market structure, client habits, and technical idiosyncrasies.
Here’s a great example: Our AI model, which has been trained on more than 200 million trades and factors in more than 15 attributes of a trade, can now predict with an accuracy rate of over 90% on the likelihood of the trade to settle by deadline, 24 hours prior to the deadline, for trades outside the U.S.
Ultimately for our clients, access to data means agility, and access to data in real time means commercial advantage.
a16z: What’s the biggest challenge facing BNY today?
Akash: From the perspective of our software and data management platform, we see a huge opportunity to meet evolving client needs and demand for an innovative capital markets data-management solution.
Our challenge is to ensure we can deliver this in an environment where technology and data ecosystems are becoming more complex, competitive, and cost-intensive for our clients. How we overcome that challenge is by staying ahead of disruptive forces impacting capital markets, such as connecting disparate pieces of the financial ecosystem, alleviating market complexity, and driving digitization and data as enablers of growth. We provide our buy side and sell side clients with a leading data management solution designed to offer deeper insights and actionable data that can help improve their investment performance, distribution reach, and risk management.
a16z: What advice do you have for early stage founders building in asset management?
Akash: Don’t let the limits of what your product can do also limit what you offer your clients; you win by combining exceptional software with the right investment product. And remember: if your focus is on the software, you need to find partners who can bring the other part of the value proposition, and vice versa.
Roll all of this into a client experience that begins with great UX and includes an end-to-end level of support that promotes trust — ultimately, you are dealing with people’s money — and you’ll be amazed at what you can accomplish.
When I meet with other founders, I also like to remind them that BNY’s founder, Alexander Hamilton, was only 29 when he created what has become one of America’s oldest companies. They often find it really inspiring that someone can build something that has endured for so long. I know it is inspirational to me.
