1
00:00:03,080 --> 00:00:06,480
Speaker 1: Global business news twenty four hours a day at Bloomberg

2
00:00:06,519 --> 00:00:09,600
Speaker 1: dot com, the Radio, plus mobile last and on your radio.

3
00:00:09,880 --> 00:00:14,080
Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.

4
00:00:14,160 --> 00:00:17,160
Speaker 1: I'm Charlie Pallet to Dow. The SMP and naz DAK

5
00:00:17,200 --> 00:00:20,280
Speaker 1: are all climbing. SMP five hundred index holding up the

6
00:00:20,400 --> 00:00:24,919
Speaker 1: highest since July, bolstered by speculation borrowing costs will remain

7
00:00:25,000 --> 00:00:28,840
Speaker 1: lower for longer amid moderate growth. The SMP five hundred

8
00:00:28,880 --> 00:00:32,040
Speaker 1: index up seven points to nineteen, a gain of four

9
00:00:32,120 --> 00:00:35,840
Speaker 1: tenths of one percent. Down Industrials up sixty eight points,

10
00:00:35,880 --> 00:00:38,519
Speaker 1: a gain of four tenths of one percent. Nasdaq is

11
00:00:38,640 --> 00:00:41,239
Speaker 1: up by three tenths of one percent. Ten your up

12
00:00:41,280 --> 00:00:45,000
Speaker 1: five thirty seconds ZAL there is one point seven oh percent.

13
00:00:45,320 --> 00:00:48,279
Speaker 1: Gold up sixteen eighty the ounds to twelve sixty three,

14
00:00:48,320 --> 00:00:50,960
Speaker 1: a gain of one point four percent, and crude oil

15
00:00:51,000 --> 00:00:53,760
Speaker 1: of eighty three cents of L fifty one nineteen right

16
00:00:53,760 --> 00:00:56,680
Speaker 1: now on West Texas Intermediate that is a gain of

17
00:00:56,760 --> 00:01:00,640
Speaker 1: one point seven percent. I'm Charlie Pealoton. That's a Bloomberg

18
00:01:00,680 --> 00:01:05,320
Speaker 1: Business Flash. You're listening to taking STI with Kathleen Hayes

19
00:01:05,360 --> 00:01:09,680
Speaker 1: and Pim Fox on Bloomberg Radio Technology. It is one

20
00:01:09,680 --> 00:01:14,399
Speaker 1: of the most powerful forces transforming the financial services industry

21
00:01:14,440 --> 00:01:17,839
Speaker 1: and a big topic of discussion here at Pershing's Insight

22
00:01:18,360 --> 00:01:22,240
Speaker 1: sixteen conference at the HIGHERT Regency in Orlando, I had

23
00:01:22,280 --> 00:01:26,520
Speaker 1: the pleasure today of moderating a panel called Invested in Innovation,

24
00:01:26,959 --> 00:01:29,840
Speaker 1: and one of those panelists is here with me and

25
00:01:30,080 --> 00:01:33,840
Speaker 1: Pim Now Swish Kamara, Senior executive vice president as he's

26
00:01:33,959 --> 00:01:38,240
Speaker 1: chief information officer at b n Y Melon Swirsh, Welcome,

27
00:01:39,800 --> 00:01:41,319
Speaker 1: what's great to have you on the show. I just

28
00:01:41,360 --> 00:01:44,920
Speaker 1: want to start by having you tell our listeners a

29
00:01:44,920 --> 00:01:47,319
Speaker 1: bit about your background, because it's so interesting. You left India,

30
00:01:48,120 --> 00:01:51,080
Speaker 1: you come to New York, you staructing your master's in

31
00:01:51,080 --> 00:01:56,080
Speaker 1: computer science, you start your own company, and then you

32
00:01:56,160 --> 00:01:58,760
Speaker 1: go to work for Pershing, which was then part of

33
00:01:58,760 --> 00:02:02,200
Speaker 1: the old d l J. Tell us about about that

34
00:02:02,280 --> 00:02:06,640
Speaker 1: experience and what you how you became a pioneer of

35
00:02:06,800 --> 00:02:09,520
Speaker 1: online brokerage here in the US. Well, you know, we

36
00:02:10,040 --> 00:02:14,880
Speaker 1: started off as a consultant at the Persian and the Prodigy,

37
00:02:14,919 --> 00:02:19,760
Speaker 1: which was an online network by Sears and IBM. They

38
00:02:19,760 --> 00:02:22,680
Speaker 1: were just starting out and before the Internet, before that,

39
00:02:22,760 --> 00:02:27,320
Speaker 1: long before they Internet, so that was um. So they

40
00:02:27,320 --> 00:02:30,839
Speaker 1: were looking for a partner to offer brokerage services, and

41
00:02:30,960 --> 00:02:36,240
Speaker 1: you know, Persian became the participant and I was happy

42
00:02:36,280 --> 00:02:40,160
Speaker 1: to be there at the beginning of an online brokerage journey.

43
00:02:40,200 --> 00:02:42,760
Speaker 1: So from there, you know, we went and offered a

44
00:02:42,800 --> 00:02:47,399
Speaker 1: similar services on American Online around ninety four, and when

45
00:02:47,400 --> 00:02:51,480
Speaker 1: the Internet became popular around ninety six, you know, we

46
00:02:51,639 --> 00:02:55,640
Speaker 1: offered d l J Direct, which is our online brokerage

47
00:02:55,760 --> 00:02:58,399
Speaker 1: on the Internet. Then you know, we went and did

48
00:02:58,440 --> 00:03:02,560
Speaker 1: the same in Tokyo, London and Hong Kong. You make

49
00:03:02,600 --> 00:03:04,640
Speaker 1: it sounds so simple, but not everybody was doing it

50
00:03:04,680 --> 00:03:07,239
Speaker 1: back then. Yeah. Well, actually, by the time you know,

51
00:03:07,400 --> 00:03:10,800
Speaker 1: we offered on the internet, you know, we had close

52
00:03:10,880 --> 00:03:14,160
Speaker 1: to eight years of experience. So Russian, Why don't you

53
00:03:14,200 --> 00:03:17,600
Speaker 1: can comment on the desire on the part of let's

54
00:03:17,600 --> 00:03:20,520
Speaker 1: say more than two thousand investment professionals that are here

55
00:03:20,520 --> 00:03:25,480
Speaker 1: attending inside. What did they want? What should have registered

56
00:03:25,480 --> 00:03:30,200
Speaker 1: the destment advisor? What do they need from technology today? Yeah?

57
00:03:30,360 --> 00:03:32,640
Speaker 1: I think that the question is what do their clients

58
00:03:32,760 --> 00:03:36,920
Speaker 1: need that the advisors need to you know offer, you know,

59
00:03:37,000 --> 00:03:40,720
Speaker 1: to me, the client expectations have dramatically changed. You know,

60
00:03:41,120 --> 00:03:45,000
Speaker 1: most people have today technology at home that's a lot

61
00:03:45,040 --> 00:03:49,680
Speaker 1: more efficient than most people have at work. So this

62
00:03:49,760 --> 00:03:52,400
Speaker 1: notion of you know, people being able to get what

63
00:03:52,480 --> 00:03:55,360
Speaker 1: they need when they needed something by twenty four uh

64
00:03:56,080 --> 00:03:59,080
Speaker 1: and and to have something that seems smart and that's

65
00:03:59,120 --> 00:04:03,000
Speaker 1: able to learn learn about client's needs is you know

66
00:04:03,040 --> 00:04:06,720
Speaker 1: what the clients want? So far as successful financial advisors,

67
00:04:06,760 --> 00:04:08,880
Speaker 1: they need to figure out how to offer that kind

68
00:04:08,920 --> 00:04:12,320
Speaker 1: of service, leveraging technology so they can scale and they

69
00:04:12,320 --> 00:04:16,479
Speaker 1: can do it selling twenty four in any device. What

70
00:04:16,520 --> 00:04:21,200
Speaker 1: does that mean leveraging technology, scaling it in real terms?

71
00:04:21,200 --> 00:04:24,359
Speaker 1: Give us an example of what how someone then can

72
00:04:24,520 --> 00:04:26,760
Speaker 1: take the step up? What would they be doing with it? Yeah,

73
00:04:26,800 --> 00:04:29,920
Speaker 1: so you know, historically, you know, an advisor may be

74
00:04:30,040 --> 00:04:34,440
Speaker 1: available you know, Monday through Friday nine f five and

75
00:04:34,520 --> 00:04:36,919
Speaker 1: if a client needs a conversation, they would make a

76
00:04:36,920 --> 00:04:39,920
Speaker 1: trip and get the information they need. Um. You know

77
00:04:39,960 --> 00:04:44,120
Speaker 1: today people clients would probably want that in their smartphone

78
00:04:44,320 --> 00:04:47,080
Speaker 1: or you know from home. Sell by twenty four. So

79
00:04:47,200 --> 00:04:51,359
Speaker 1: the ability to access information when they need to, the

80
00:04:51,400 --> 00:04:55,280
Speaker 1: ability to communicate, I think it is becoming an important aspect.

81
00:04:55,839 --> 00:05:00,280
Speaker 1: Is there any negative to that increased volatility? Is there

82
00:05:00,320 --> 00:05:03,880
Speaker 1: any need really to be so short term oriented. If

83
00:05:03,920 --> 00:05:08,000
Speaker 1: you are a retail investor, why use this technology If

84
00:05:08,040 --> 00:05:10,640
Speaker 1: everyone says have a diversified portfolio, what I looked to

85
00:05:10,680 --> 00:05:14,280
Speaker 1: the long term? Yeah, I think it's more about convenience

86
00:05:14,720 --> 00:05:17,880
Speaker 1: rather than being able to do when you have the time,

87
00:05:18,600 --> 00:05:21,520
Speaker 1: rather than being able to trade sound by twenty four.

88
00:05:21,600 --> 00:05:23,800
Speaker 1: You know, for the most part, people looking for advice

89
00:05:24,320 --> 00:05:27,239
Speaker 1: if they are busy professionals, you know, doing it Monday

90
00:05:27,279 --> 00:05:29,320
Speaker 1: through Friday, and I'd be the most effective way, you know,

91
00:05:29,400 --> 00:05:31,320
Speaker 1: so they would like to do it when they have

92
00:05:31,400 --> 00:05:34,880
Speaker 1: the time on the weekend, and so so be and

93
00:05:35,000 --> 00:05:42,520
Speaker 1: my melon pushing um Silicon Valley innovation centers where it

94
00:05:42,839 --> 00:05:46,280
Speaker 1: just seems to me that it's it's tough because, uh,

95
00:05:46,680 --> 00:05:49,160
Speaker 1: pushing ahead developing a technology great, But you've got a

96
00:05:49,200 --> 00:05:51,599
Speaker 1: lot of little fin techs. They've got all kinds of people,

97
00:05:51,880 --> 00:05:54,400
Speaker 1: you know, pushing and hoping they can disrupt you, right,

98
00:05:54,520 --> 00:05:56,760
Speaker 1: And it's great to be the disruptor, but it's not

99
00:05:56,880 --> 00:06:01,039
Speaker 1: so great to be disrupt dead. Um. It's an interesting point.

100
00:06:01,120 --> 00:06:05,640
Speaker 1: You know, as a large financial institution, we have lots

101
00:06:05,680 --> 00:06:10,359
Speaker 1: of capital, you know, we have great financial strength, We

102
00:06:10,440 --> 00:06:13,919
Speaker 1: have clients, we have phenomenal amount of data about what

103
00:06:14,040 --> 00:06:17,440
Speaker 1: the clients do, all the things of fintech would love

104
00:06:17,480 --> 00:06:20,880
Speaker 1: to have UM and the thing that FinTechs have is

105
00:06:20,960 --> 00:06:24,720
Speaker 1: their passion and and their willingness to try different things

106
00:06:25,240 --> 00:06:28,000
Speaker 1: UM and to be able to leverage open source software

107
00:06:28,080 --> 00:06:31,640
Speaker 1: or cloud computing. So our opportunity is to really figure

108
00:06:31,680 --> 00:06:34,120
Speaker 1: out not to treat them like as someone who's trying

109
00:06:34,160 --> 00:06:36,200
Speaker 1: to compete with us, but more to figure out how

110
00:06:36,279 --> 00:06:39,600
Speaker 1: to take the best practices of fintech as well as

111
00:06:39,640 --> 00:06:42,760
Speaker 1: to potentially leverage them so that our clients can get

112
00:06:42,760 --> 00:06:46,919
Speaker 1: the benefit of both. How does financial technology and fintech

113
00:06:47,160 --> 00:06:52,240
Speaker 1: benefit the smaller asset manager? Well, I think that what

114
00:06:52,320 --> 00:06:55,039
Speaker 1: you're going to see. You know, historically, you know, people

115
00:06:55,080 --> 00:06:58,000
Speaker 1: had this cineo monolithic applications, and you know we're a

116
00:06:58,120 --> 00:07:02,560
Speaker 1: very long UH sales cycle and and and the cost

117
00:07:02,640 --> 00:07:05,599
Speaker 1: of making a choice used to be you know, really high.

118
00:07:06,160 --> 00:07:07,840
Speaker 1: You and now with a lot of small in a

119
00:07:07,960 --> 00:07:10,920
Speaker 1: small fin techs and the next and platform that we have,

120
00:07:11,800 --> 00:07:14,000
Speaker 1: people will be able to pick and choose on a

121
00:07:14,080 --> 00:07:18,440
Speaker 1: variable cause basis UH dramatically reducing the time it takes

122
00:07:18,440 --> 00:07:21,040
Speaker 1: to get something done as well as to avoid any

123
00:07:21,120 --> 00:07:24,320
Speaker 1: major mistakes, So you're going to see more and more

124
00:07:24,560 --> 00:07:27,480
Speaker 1: people being able to try different things a lot quicker

125
00:07:27,520 --> 00:07:31,320
Speaker 1: than in the past. What about the threat that all

126
00:07:31,360 --> 00:07:35,320
Speaker 1: this technology poses to your customers? Here the the advisors,

127
00:07:35,480 --> 00:07:40,400
Speaker 1: uh robo advisors, algorithms, artificial intelligence. At some point of

128
00:07:40,440 --> 00:07:42,440
Speaker 1: it to say, who needs a human being? I could

129
00:07:42,440 --> 00:07:45,040
Speaker 1: just plug all my data. Maybe you guys would even say, fine,

130
00:07:45,400 --> 00:07:47,760
Speaker 1: we'll just plug all information in. We'll spit it out

131
00:07:47,760 --> 00:07:50,600
Speaker 1: to you and you know, forget all these advisors running around.

132
00:07:50,720 --> 00:07:53,320
Speaker 1: So you know, it's interesting you say that because I

133
00:07:53,440 --> 00:07:57,880
Speaker 1: used to think like that, that's a upcoming online brokerage.

134
00:07:58,040 --> 00:08:01,200
Speaker 1: I you know, always thought that tchnologies to answer to

135
00:08:01,280 --> 00:08:04,960
Speaker 1: every problem. Uh now with all the experience and maybe

136
00:08:04,960 --> 00:08:07,000
Speaker 1: a little more money to protect them in the past,

137
00:08:07,440 --> 00:08:10,160
Speaker 1: I would rather talk to a human being because you know,

138
00:08:10,800 --> 00:08:12,200
Speaker 1: at the end of the day, there is a lot

139
00:08:12,240 --> 00:08:16,760
Speaker 1: more to financial advice, you know, than as an allocation

140
00:08:17,720 --> 00:08:21,080
Speaker 1: in using the technology. Tell us about the cost? How

141
00:08:21,080 --> 00:08:25,560
Speaker 1: has that changed? While clearly the cost of transacting for

142
00:08:25,640 --> 00:08:28,520
Speaker 1: the industry has come down, and you know you're going

143
00:08:28,520 --> 00:08:30,680
Speaker 1: to see more and more of that even with the

144
00:08:30,720 --> 00:08:33,559
Speaker 1: likes of blockchain and distribute a ledger so I think

145
00:08:33,559 --> 00:08:36,080
Speaker 1: there's going to be an opportunity for the industry to

146
00:08:36,200 --> 00:08:39,720
Speaker 1: remove the friction you know that takes place between transactions

147
00:08:39,760 --> 00:08:43,079
Speaker 1: between different participants. Um. So certainly I think it will

148
00:08:43,120 --> 00:08:46,360
Speaker 1: be better for the clients. So the cost of doing

149
00:08:46,480 --> 00:08:49,480
Speaker 1: business should keep going down. What is the friction for

150
00:08:49,520 --> 00:08:51,000
Speaker 1: those of us who do not work at a large

151
00:08:51,000 --> 00:08:55,079
Speaker 1: financial institution in these transactions? And how will the blockchain

152
00:08:55,160 --> 00:08:56,960
Speaker 1: which is what the pitcoins based on, or we know

153
00:08:57,000 --> 00:08:58,880
Speaker 1: we're not talking about pitcos, we're talking about code, a

154
00:08:58,880 --> 00:09:02,920
Speaker 1: new kind of code. Why is this such a revolutionary thing,

155
00:09:03,240 --> 00:09:06,680
Speaker 1: this new this new blockchain. Yeah, you know, when you

156
00:09:06,840 --> 00:09:10,200
Speaker 1: have a large number of participants trying to get something done,

157
00:09:10,920 --> 00:09:16,160
Speaker 1: usually you had lots of intermediaries, lots of reconciliation, and

158
00:09:16,520 --> 00:09:19,040
Speaker 1: you know the end result was things to time to

159
00:09:19,120 --> 00:09:24,320
Speaker 1: get something done. And obviously, yeah, our cross board of

160
00:09:24,320 --> 00:09:28,239
Speaker 1: payments are trade, finance, you know, any number of things

161
00:09:28,280 --> 00:09:31,559
Speaker 1: that we do today. Um, and it's mostly because of that.

162
00:09:31,920 --> 00:09:35,480
Speaker 1: You know, things cost money and there are lots of exceptions. Uh,

163
00:09:35,520 --> 00:09:38,559
Speaker 1: you know, the expectations is a technology like a blockchain

164
00:09:38,559 --> 00:09:43,040
Speaker 1: and a distributed ledger or dramatically reduced the disagreement that

165
00:09:43,120 --> 00:09:45,839
Speaker 1: people may have because everyone is looking at the same thing,

166
00:09:46,280 --> 00:09:49,599
Speaker 1: for example, a corporate action. And I imagine if you

167
00:09:49,679 --> 00:09:51,720
Speaker 1: were to have a distribute a ledger of all the

168
00:09:51,760 --> 00:09:55,360
Speaker 1: securities and the corporate actions in one place and everyone

169
00:09:55,400 --> 00:09:57,880
Speaker 1: looked at it, it will cost us a lot less,

170
00:09:58,000 --> 00:09:59,880
Speaker 1: you know, to process, and you can do the same

171
00:10:00,040 --> 00:10:02,000
Speaker 1: in with the K Y c R A m L.

172
00:10:03,120 --> 00:10:05,960
Speaker 1: What kinds of workers, what kinds of skills are you

173
00:10:06,080 --> 00:10:10,720
Speaker 1: looking for specifically to join Pershing? Yeah, I you know,

174
00:10:10,960 --> 00:10:14,240
Speaker 1: it's a it's a great question. Uh that technology is

175
00:10:14,360 --> 00:10:19,400
Speaker 1: changing fast, our client needs are changing enough fast. Um,

176
00:10:19,440 --> 00:10:21,880
Speaker 1: so clearly we're looking for you know, what we call

177
00:10:22,000 --> 00:10:25,760
Speaker 1: full stack engineers, people who can do the user experience

178
00:10:26,000 --> 00:10:28,880
Speaker 1: as well as the back end as well as you know,

179
00:10:29,080 --> 00:10:31,800
Speaker 1: they need to be more sensitive to what's out there

180
00:10:31,800 --> 00:10:35,440
Speaker 1: in the marketplace, have a good understanding of what the

181
00:10:35,480 --> 00:10:38,160
Speaker 1: clients are expecting. So you know, you're kind of looking

182
00:10:38,200 --> 00:10:41,079
Speaker 1: at not just a pure technologist anymore. You're also looking

183
00:10:41,120 --> 00:10:44,880
Speaker 1: for people with some understanding of the clients and the products.

184
00:10:45,240 --> 00:10:46,960
Speaker 1: Thank you very much for joining us, and thank you

185
00:10:47,000 --> 00:10:50,280
Speaker 1: for having us here. Suresh Kumar is a senior executive

186
00:10:50,360 --> 00:10:53,920
Speaker 1: vice president and the chief Information Officer for b n

187
00:10:54,240 --> 00:10:58,920
Speaker 1: Y Melant. We are broadcasting live from Pershing's Inside Conference

188
00:10:58,960 --> 00:11:02,360
Speaker 1: at the Higher Regency Orlando, and this marks eighteen years

189
00:11:02,360 --> 00:11:05,440
Speaker 1: of insight, eighteen years committed to the success of advisors,

190
00:11:05,480 --> 00:11:08,719
Speaker 1: and we have over two thousand financial professionals from all

191
00:11:08,760 --> 00:11:11,640
Speaker 1: over the globe attendant. If you're listening to the Bloomberg

192
00:11:11,720 --> 00:11:12,000
Speaker 1: Radio