BNY Mellon: Structuring the business for constant digital change

Sooraj Shah — July 2019

Roman Regelman, head of digital at BNY Mellon, explains the thinking behind the bank’s Three Digital Horizons strategy, its group-wide Digital Council and an aversion to two-speed IT.

When a new CEO took over at Bank of New York Mellon (BNY Mellon) in mid-2017, the digital agenda at the 235-year-old global investments company rapidly moved up a gear. Charlie Scharf was not only the former head of credit card company Visa, he had also sat as a Microsoft board director since 2014, observing closely what approaches succeed — and which don’t — as companies embrace digital transformation.

It did not take him long to appoint a head of digital and hand him a radical mandate. Joining from Boston Consulting Group, digital business change consultant Roman Regelman was given a remit to bring structure and consistency to BNY Mellon’s different digital programs in order to “digitize everything the firm does, changing each process, product and client interaction so they are digital,” he says.

“BNY had numerous digital initiatives before I joined: separate projects focusing on revenue, efficiency and technology, but Charlie wanted those united under somebody who focuses on digital day in and day out,” says Regelman, who reports directly to the CEO and works in tandem with company CIO Bridget Engle.

Roman Regelman, head of digital, BNY Mellon

As a starting point, Regelman drove digital decision-making deep into the business by establishing a global Digital Council of 32 members drawn from all major lines of business, functions and geographies. It included leaders of core divisions, as well as chief digital officers (CDOs) from each part of the business.

“The CDOs are, in essence, versions of me focused on that business’s digital agenda. As chair of the group, I can ensure the agendas are consistent and don’t duplicate efforts. Functions like HR and finance also have representation, as we need them to play a role in changing the way we work and the way we do budgets and provide efficiency,” he says.
Three Horizons

Regelman sees BNY Mellon’s evolution as moving towards what he refers to as Three Digital Horizons — the digitization of the enterprise’s core activities, re-imagining the end-to-end client journey and developing new products and services with the help of an ecosystem of partners.

The first horizon is about applying digital to its existing portfolio of processes and products to eradicate wasteful and frustrating practices such as paper and manual client interactions. Here automation and robotics are already planning a big role, he highlights.

Horizon two is about focusing on creating joined-up customer services, by ensuring organizational siloes are broken down and their structures and associated systems integrated so that areas like collateral management and accounting for clients are delivered as a seamless, end-to-end service.

The third horizon is around the creation of new products, services and business models by leveraging both internal capabilities and an ecosystem of partners, that become integral to clients’ activities.

“We have 52,000 people globally and we need 52,000 digital people.”

That focus on new ways of doing things should not be taken as a desire to separate legacy IT and digital activities — far from it, says Regelman. While some industry analysts have advised that companies adopt a two-speed or bimodal approach to IT, Regelman isn’t convinced that works in practice.

“People talk about two-speed IT when they are stuck in old ways of working yet want to experiment with new approaches,” he says. “But we’re not experimenting; when I talk about the work we’re doing with robotics, AI and machine-learning, these are part of our core organization today,” he adds.

The emphasis is on applying digital across the board. “We have 52,000 people globally and we need 52,000 digital people, whether we are changing the core system to be more reliable or creating a great new wealth management experience for clients. It’s not just about new apps and experimenting, it has to be about end-to-end delivery,” he says.
Raising the digital IQ

The aim of creating company-wide digital knowledge is reflected in BNY Mellon’s approach to technology skills recruitment too.

The company is certainly bringing expertise into digital areas such as AI but that is not enough, says Regelman. “Companies talk about how they need to hire thousands of people to do AI — we do hire AI experts but everyone here is in the front line and therefore the business needs to upskill existing staff too.” It is vitally important to increase the digital IQ of all staff, he argues.

“If you can extract the knowledge of a business operations person who has been in a role for 15 years, talking to clients all day long, and put somebody next to them who actually knows how to process this knowledge — whether it’s a person or a machine — then you create an extremely powerful combination. So we’re focusing on unlocking the power of our enterprise, meaning unlocking the power of 52,000 people,” says Regelman.
CIO-CDO axis

As part of the digital agenda at BNY Mellon, Regelman collaborates closely with CIO Bridget Engle. He sees his role as quite distinct yet complementary. The CIO’s focus is on ensuring the company’s technology investments deliver robust services and generate value, he says. “In that sense, technology is a function of the business, whereas digital transcends any single function. Digital is a way of working, it’s a way of thinking, it’s a way of feeding new business.”

And that means it is the fuel for continuous change. “The goal of our transformation to move us along this digital continuum, where we are constantly creating capacity by automating and digitizing our core activities and channeling this capacity into creating new value,” he says.