Two of America's largest financial organizations are integrating data with each other, boosting revenues as traditional back-office business lines come under pressure.
BNY Mellon, whose Pershing business caters to organizations such as wealth managers in the US and abroad, intends to deliver real-time information on trades, asset prices and cash positions to the 40-50 clients it shares with BlackRock’s Aladdin, a system money managers use to analyze their investment portfolios and manage their risks, the report said.
The US firms said that their overlapping clients can get information faster and cut down on phone calls and emails.
The firms are trying to move beyond the back-office business model and deliver new services pitched at senior executives and investment staff, and boost their earnings as a result. With certain back-office functions also threatened by the rise of distributed ledger technology such as Blockchain, the need to diversify revenues intensifies.
The WSJ said BlackRock’s Aladdin has 225 clients, and competes with State Street’s Charles River Systems and other platforms for space on the desktop computers of investors and their traders. BlackRock expects that the new partnership will deepen ties to existing customers while potentially bringing in new ones that use BNY Mellon for custody and fund accounting.
The report quoted Hani Kablawi, chief executive of BNY Mellon's asset-servicing business, as saying that the pact with BlackRock will be the first of several partnerships it intends to reach with data and analytics platforms. “This is the first major partnership that we are announcing and further deepens our relationship with BlackRock, one of our most important clients,” Kablawi reportedly wrote in a memo to staff.