BNY Mellon banks to implement an AI-based tool

The implementation of this tool is part of the bank's continuous efforts to improve data management and meet regulatory requirements for identifying customers and their relationships. Improving the in-house solution would have been time-consuming, so the bank turned to a third-party vendor, Quantexa, a British software developer that uses machine learning and multiple public data sources to enhance the entity resolution process. Quantexa's software platform can not only do entity resolution but also map networks of connections in the data - who trades with whom, who shares an address, and so on.

One key challenge in this endeavour is being able to identify all the data related to an individual customer and to identify the relationships that link that customer with others. Banks have a regulatory requirement to know whom they are dealing with, often referred to as KYC to meet anti-money laundering and other obligations.

Being able to identify which of many loans have been made to the same person or company is also important for banks to manage their risk exposure. The problem is not unique to banks, as a wide range of companies can benefit from a better understanding of their exposure to individual suppliers or customers.

Therefore, recognising that divisions already had their own spending priorities, the bank set aside a central budget that each division could draw on to hire developers to ensure they all had the resources to implement this customer master. With the work of harmonising customer definitions out of the way, the bank could focus on eliminating duplicates.

BNY Mellon had built some sophisticated software itself to disambiguate its own customer database. There was some automation around the process, but the software still required manual intervention to resolve some cases, and the bank needed something better.

BNY’s recent developments

In December 2023, Conduent partnered with BNY Mellon to launch a Digital Integrated Payments Hub that expands access to payments to businesses and public sector agencies. Having integrated BNY Mellon’s infrastructure payment capabilities, Conduent’s Digital Integrated Payments Hub expedites refunds, rebates, and overpayment remediations in a matter of minutes, while simultaneously offering the possibility of tracking transactions in a convenient and transparent manner.

Moreover, BNY Mellon partnered with B2B financial marketplace Fiserv to expand real-time FX rate quotes for payments from US financial institutions.Through this partnership, financial institutions that use Fiserv’s  Payments Exchange: Foreign Exchange Services will also receive access to BNY Mellon's real-time FX rate quotes in more than 120 countries. The collaboration allows US-based financial institutions to execute currency conversions for cross-border payments while benefiting from rate visibility upfront.