Hans Brown lights up when conversation about digital transformation in banking turns toward open-source programming.
“I’m a huge believer in open source,” he told DigFin.
Brown is the head of enterprise innovation at BNY Mellon, as well as its chief information officer for corporate technology.
The bank’s tech budget in 2019 was $3 billion and has over 11,000 technologists and developers globally, supporting a $37 trillion custody business along with clearing, payments and asset management.
It’s one thing for a techie to get excited about open source, even one as senior as Brown. But does it matter to the business heads: the folks driving revenues, product and client relations?
Brown says they benefit from the bank’s increasing ability to deliver plug-and-play solutions, fintech partnerships, and more secure software.
One broad area where he says his team has been making headway is in artificial intelligence.
“Data and quantitative metrics are backward looking,” he said. “The real opportunity is advanced A.I. and machine learning analytics. These are going to buttress our existing qualitative approach to deriving forward-looking insight.”
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He says the bank is rolling out tools to help the front office make decisions faster with a degree of predictive analytics. “Our investment in data analytics will really pay off from 2021,” he said.
Although he was not prepared to detail these, he says one example will be applications for ESG investment analytics. “We sit on a mountain of data and have many fintech relationships,” Brown said. “We’re using this to create ESG insights to augment investment portfolios.”
Ethics in tech
One of his priorities is helping steer internal conversations around the ethical uses of A.I.
Brown, now working from home out of the bank’s New York headquarters, was previously stationed in Singapore. There he was part of the advisory group assembled by the Monetary Authority of Singapore for its project Veritas, which led to guidelines around A.I. ethics.
COVID was the chief digital officer everyone didn’t wantHans Brown, BNY Mellon
Being located now in the U.S., which is going through a social upheaval regarding issues of inequality, has given such discussions fresh impetus, including within the bank and with its clients. As the industry develops new apps, the algorithms driving decisions have to be designed with fairness in mind.
“We need transparency and insight to address any issue,” Brown said, “and examine it from a data-driven perspective rather than from pure opinion.”
This comes back to how BNY Mellon is driving its digital development. Open source allows Brown’s team to be flexible, exploit the network effects of commonly used software, and integrate applications into the existing systems.
Brown has taken the open-source ethos to heart, saying that he has three team members who are members of the Java Community Process executive committee. Projects under the JCP umbrella include Eclipse, an IBM-backed development environment for coders who write apps using Java and other computer languages.
We’re a bank, contributing code lines to the open-source communityHans Brown, BNY Mellon
BNY Mellon is the only bank represented there, along with the likes of Twitter, Intel and Alibaba.
“We’re a bank, contributing code lines to the open-source community,” Brown says. This helps expand the adoption of Java both inside the bank and externally, which is in keeping with the corporate-citizenship ethos of open source.
But it also has a practical side. Most banks continue to rely on proprietary, closed ecosystems and vendors. “Their ability to evolve and innovate comes down to their balance sheet and their R&D budget,” he said. “Open source means everybody is contributing, which generates more secure code and better apps. So when a client of ours wants us to deliver them an app in a particular way, we can. Open source is now embedded in our product development.”
Open to transformation
Although Brown was already leading the bank this way before COVID-19 struck, the pandemic has hastened digitization and affirmed Brown’s belief in going open source. It forced the entire industry to restructure around working from home in a matter of weeks.
“COVID was the [chief digital officer] that everyone didn’t want,” Brown joked.
For 2021 the emphasis will be on connecting how the bank deploys apps under open-source protocols, and how it helps clients consume those services digitally.
Delivering AI-empowered analytics via open-source code will have one more challenge this year: helping people create new business relationships. Digitization enabled experienced bankers to stay in touch with their clients, counterparties and teams.
“We saw that it’s easier to sustain relationships digitally than to create new ones,” Brown said. “We need to apply those lessons to drive new connections.”
The three BNY Mellon Technology executives sitting on the JCP executive committee are: Donald Raab, Chandra Guntur and Nikhil Nanivadekar.