BNY Mellon and Google Cloud team up for predicting fails in Fed-eligible securities

BNY Mellon announced a collaboration with Google Cloud to help market participants better predict billions of dollars in daily settlement failures, generate significant capital and liquidity savings, and unlock operational efficiencies. The initiative, which helps to extend BNY Mellon’s growing portfolio of emerging technology capabilities, will leverage Google Cloud’s data analytics, artificial intelligence (AI) and machine learning (ML) technologies to develop new collateral management and liquidity solutions built on Google Cloud.

BNY Mellon continues to heavily invest in advanced solutions that include the cloud, AI, ML and distributed ledger technology. This collaboration is the latest example of its open-architecture approach of working together with leading technology providers to extend its capabilities in reimagining and delivering solutions to meet client needs. In addition to creating use cases for the US Treasury market, BNY Mellon is developing AI-powered solutions for securities lending, liquidity forecasting, dynamic controls for pricing, anomaly detection for transactions, and automated document processing.

Brian Ruane, CEO in the Clearance and Collateral Management unit of BNY Mellon, said that clients can predict approximately 40% of settlement failures in Fed-eligible securities with 90% accuracy, in a statement. He added: “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. 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.”

The US Treasury market is the largest and the most liquid market in the world and BNY Mellon is the provider of clearance and settlement. On a typical day, approximately 2% of transactions fail to settle. BNY Mellon is using Google Cloud for its scalable data analytics capabilities and to train models on millions of trades to consider every value and factor that could result in a failure. This will help reduce client risk and create a more efficient financial market with fewer failure points and greater liquidity. BNY Mellon is also leveraging Google Cloud to support more development environments, making code delivery quicker while reducing infrastructure costs.


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