Securities Finance Technology News | BNY Mellon tackles settlement failures with Google Cloud


BNY Mellon Set to Leverage Google Cloud’s Data Analytics, Artificial Intelligence (AI) and Machine Learning (ML) Technologies to Develop ‘First-of-its-Kind’ Collateral and Liquidity Management Solution to reduce settlement failures.

The partnership aims to help market participants better predict billions of dollars in daily settlement failures, generate significant capital and liquidity savings, and unlock operational efficiencies.

The bank says tools powered by Google Cloud could help customers predict 40% of daily settlement failures in the US Treasury market to improve overall market liquidity.

The US Treasury market is the largest and most liquid market in the world, but on a typical day, about 2% of trades go unsettled.

The deal is part of BNY Mellon’s “open architecture approach” of exploring emerging technologies, including AI, ML and blockchain, to reframe common commerce challenges and settlement through a technology-driven lens.

In addition to creating use cases for the US Treasury market, BNY Mellon develops AI-based solutions for securities lending, liquidity forecasting, dynamic pricing controls, anomaly detection for transactions and automated document processing.

“We are excited to work with Google Cloud to develop a first-of-its-kind solution to help our customers predict approximately 40% of settlement failures for Fed-eligible securities with 90% accuracy,” said Brian Ruane, CEO of Customs clearance and management of guarantees from BNY Mellon.

“This prediction model could be a game-changer for market participants and is a great showcase of how we are leveraging emerging technologies, such as public cloud, to accelerate the delivery of meaningful solutions to our customers.”

Elsewhere, BNY Mellon is driving the adoption of emerging technologies through the Risk Management Association, where Charles Post, head of legal data management and consulting, co-chairs the fintech and automation committee.

The committee was formed in 2019 and works to reduce risk in financial markets by leveraging technologies that facilitate securities lending, trading, collateral management, funding, clearing and settlement.

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