WEBVTT - BNY Mellon's Kumar on Financial Tech Trends, Products (Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Charlie Pallet to Dow. The SMP and naz DAK

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<v Speaker 1>are all climbing. SMP five hundred index holding up the

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<v Speaker 1>highest since July, bolstered by speculation borrowing costs will remain

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<v Speaker 1>lower for longer amid moderate growth. The SMP five hundred

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<v Speaker 1>index up seven points to nineteen, a gain of four

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<v Speaker 1>tenths of one percent. Down Industrials up sixty eight points,

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<v Speaker 1>a gain of four tenths of one percent. Nasdaq is

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<v Speaker 1>up by three tenths of one percent. Ten your up

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<v Speaker 1>five thirty seconds ZAL there is one point seven oh percent.

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<v Speaker 1>Gold up sixteen eighty the ounds to twelve sixty three,

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<v Speaker 1>a gain of one point four percent, and crude oil

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<v Speaker 1>of eighty three cents of L fifty one nineteen right

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<v Speaker 1>now on West Texas Intermediate that is a gain of

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<v Speaker 1>one point seven percent. I'm Charlie Pealoton. That's a Bloomberg

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<v Speaker 1>Business Flash. You're listening to taking STI with Kathleen Hayes

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<v Speaker 1>and Pim Fox on Bloomberg Radio Technology. It is one

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<v Speaker 1>of the most powerful forces transforming the financial services industry

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<v Speaker 1>and a big topic of discussion here at Pershing's Insight

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<v Speaker 1>sixteen conference at the HIGHERT Regency in Orlando, I had

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<v Speaker 1>the pleasure today of moderating a panel called Invested in Innovation,

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<v Speaker 1>and one of those panelists is here with me and

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<v Speaker 1>Pim Now Swish Kamara, Senior executive vice president as he's

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<v Speaker 1>chief information officer at b n Y Melon Swirsh, Welcome,

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<v Speaker 1>what's great to have you on the show. I just

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<v Speaker 1>want to start by having you tell our listeners a

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<v Speaker 1>bit about your background, because it's so interesting. You left India,

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<v Speaker 1>you come to New York, you staructing your master's in

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<v Speaker 1>computer science, you start your own company, and then you

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<v Speaker 1>go to work for Pershing, which was then part of

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<v Speaker 1>the old d l J. Tell us about about that

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<v Speaker 1>experience and what you how you became a pioneer of

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<v Speaker 1>online brokerage here in the US. Well, you know, we

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<v Speaker 1>started off as a consultant at the Persian and the Prodigy,

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<v Speaker 1>which was an online network by Sears and IBM. They

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<v Speaker 1>were just starting out and before the Internet, before that,

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<v Speaker 1>long before they Internet, so that was um. So they

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<v Speaker 1>were looking for a partner to offer brokerage services, and

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<v Speaker 1>you know, Persian became the participant and I was happy

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<v Speaker 1>to be there at the beginning of an online brokerage journey.

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<v Speaker 1>So from there, you know, we went and offered a

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<v Speaker 1>similar services on American Online around ninety four, and when

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<v Speaker 1>the Internet became popular around ninety six, you know, we

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<v Speaker 1>offered d l J Direct, which is our online brokerage

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<v Speaker 1>on the Internet. Then you know, we went and did

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<v Speaker 1>the same in Tokyo, London and Hong Kong. You make

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<v Speaker 1>it sounds so simple, but not everybody was doing it

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<v Speaker 1>back then. Yeah. Well, actually, by the time you know,

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<v Speaker 1>we offered on the internet, you know, we had close

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<v Speaker 1>to eight years of experience. So Russian, Why don't you

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<v Speaker 1>can comment on the desire on the part of let's

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<v Speaker 1>say more than two thousand investment professionals that are here

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<v Speaker 1>attending inside. What did they want? What should have registered

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<v Speaker 1>the destment advisor? What do they need from technology today? Yeah?

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<v Speaker 1>I think that the question is what do their clients

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<v Speaker 1>need that the advisors need to you know offer, you know,

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<v Speaker 1>to me, the client expectations have dramatically changed. You know,

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<v Speaker 1>most people have today technology at home that's a lot

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<v Speaker 1>more efficient than most people have at work. So this

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<v Speaker 1>notion of you know, people being able to get what

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<v Speaker 1>they need when they needed something by twenty four uh

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<v Speaker 1>and and to have something that seems smart and that's

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<v Speaker 1>able to learn learn about client's needs is you know

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<v Speaker 1>what the clients want? So far as successful financial advisors,

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<v Speaker 1>they need to figure out how to offer that kind

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<v Speaker 1>of service, leveraging technology so they can scale and they

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<v Speaker 1>can do it selling twenty four in any device. What

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<v Speaker 1>does that mean leveraging technology, scaling it in real terms?

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<v Speaker 1>Give us an example of what how someone then can

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<v Speaker 1>take the step up? What would they be doing with it? Yeah,

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<v Speaker 1>so you know, historically, you know, an advisor may be

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<v Speaker 1>available you know, Monday through Friday nine f five and

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<v Speaker 1>if a client needs a conversation, they would make a

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<v Speaker 1>trip and get the information they need. Um. You know

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<v Speaker 1>today people clients would probably want that in their smartphone

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<v Speaker 1>or you know from home. Sell by twenty four. So

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<v Speaker 1>the ability to access information when they need to, the

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<v Speaker 1>ability to communicate, I think it is becoming an important aspect.

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<v Speaker 1>Is there any negative to that increased volatility? Is there

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<v Speaker 1>any need really to be so short term oriented. If

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<v Speaker 1>you are a retail investor, why use this technology If

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<v Speaker 1>everyone says have a diversified portfolio, what I looked to

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<v Speaker 1>the long term? Yeah, I think it's more about convenience

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<v Speaker 1>rather than being able to do when you have the time,

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<v Speaker 1>rather than being able to trade sound by twenty four.

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<v Speaker 1>You know, for the most part, people looking for advice

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<v Speaker 1>if they are busy professionals, you know, doing it Monday

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<v Speaker 1>through Friday, and I'd be the most effective way, you know,

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<v Speaker 1>so they would like to do it when they have

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<v Speaker 1>the time on the weekend, and so so be and

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<v Speaker 1>my melon pushing um Silicon Valley innovation centers where it

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<v Speaker 1>just seems to me that it's it's tough because, uh,

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<v Speaker 1>pushing ahead developing a technology great, But you've got a

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<v Speaker 1>lot of little fin techs. They've got all kinds of people,

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<v Speaker 1>you know, pushing and hoping they can disrupt you, right,

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<v Speaker 1>And it's great to be the disruptor, but it's not

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<v Speaker 1>so great to be disrupt dead. Um. It's an interesting point.

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<v Speaker 1>You know, as a large financial institution, we have lots

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<v Speaker 1>of capital, you know, we have great financial strength, We

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<v Speaker 1>have clients, we have phenomenal amount of data about what

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<v Speaker 1>the clients do, all the things of fintech would love

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<v Speaker 1>to have UM and the thing that FinTechs have is

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<v Speaker 1>their passion and and their willingness to try different things

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<v Speaker 1>UM and to be able to leverage open source software

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<v Speaker 1>or cloud computing. So our opportunity is to really figure

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<v Speaker 1>out not to treat them like as someone who's trying

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<v Speaker 1>to compete with us, but more to figure out how

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<v Speaker 1>to take the best practices of fintech as well as

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<v Speaker 1>to potentially leverage them so that our clients can get

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<v Speaker 1>the benefit of both. How does financial technology and fintech

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<v Speaker 1>benefit the smaller asset manager? Well, I think that what

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<v Speaker 1>you're going to see. You know, historically, you know, people

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<v Speaker 1>had this cineo monolithic applications, and you know we're a

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<v Speaker 1>very long UH sales cycle and and and the cost

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<v Speaker 1>of making a choice used to be you know, really high.

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<v Speaker 1>You and now with a lot of small in a

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<v Speaker 1>small fin techs and the next and platform that we have,

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<v Speaker 1>people will be able to pick and choose on a

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<v Speaker 1>variable cause basis UH dramatically reducing the time it takes

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<v Speaker 1>to get something done as well as to avoid any

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<v Speaker 1>major mistakes, So you're going to see more and more

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<v Speaker 1>people being able to try different things a lot quicker

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<v Speaker 1>than in the past. What about the threat that all

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<v Speaker 1>this technology poses to your customers? Here the the advisors,

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<v Speaker 1>uh robo advisors, algorithms, artificial intelligence. At some point of

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<v Speaker 1>it to say, who needs a human being? I could

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<v Speaker 1>just plug all my data. Maybe you guys would even say, fine,

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<v Speaker 1>we'll just plug all information in. We'll spit it out

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<v Speaker 1>to you and you know, forget all these advisors running around.

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<v Speaker 1>So you know, it's interesting you say that because I

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<v Speaker 1>used to think like that, that's a upcoming online brokerage.

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<v Speaker 1>I you know, always thought that tchnologies to answer to

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<v Speaker 1>every problem. Uh now with all the experience and maybe

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<v Speaker 1>a little more money to protect them in the past,

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<v Speaker 1>I would rather talk to a human being because you know,

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<v Speaker 1>at the end of the day, there is a lot

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<v Speaker 1>more to financial advice, you know, than as an allocation

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<v Speaker 1>in using the technology. Tell us about the cost? How

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<v Speaker 1>has that changed? While clearly the cost of transacting for

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<v Speaker 1>the industry has come down, and you know you're going

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<v Speaker 1>to see more and more of that even with the

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<v Speaker 1>likes of blockchain and distribute a ledger so I think

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<v Speaker 1>there's going to be an opportunity for the industry to

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<v Speaker 1>remove the friction you know that takes place between transactions

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<v Speaker 1>between different participants. Um. So certainly I think it will

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<v Speaker 1>be better for the clients. So the cost of doing

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<v Speaker 1>business should keep going down. What is the friction for

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<v Speaker 1>those of us who do not work at a large

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<v Speaker 1>financial institution in these transactions? And how will the blockchain

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<v Speaker 1>which is what the pitcoins based on, or we know

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<v Speaker 1>we're not talking about pitcos, we're talking about code, a

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<v Speaker 1>new kind of code. Why is this such a revolutionary thing,

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<v Speaker 1>this new this new blockchain. Yeah, you know, when you

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<v Speaker 1>have a large number of participants trying to get something done,

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<v Speaker 1>usually you had lots of intermediaries, lots of reconciliation, and

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<v Speaker 1>you know the end result was things to time to

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<v Speaker 1>get something done. And obviously, yeah, our cross board of

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<v Speaker 1>payments are trade, finance, you know, any number of things

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<v Speaker 1>that we do today. Um, and it's mostly because of that.

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<v Speaker 1>You know, things cost money and there are lots of exceptions. Uh,

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<v Speaker 1>you know, the expectations is a technology like a blockchain

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<v Speaker 1>and a distributed ledger or dramatically reduced the disagreement that

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<v Speaker 1>people may have because everyone is looking at the same thing,

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<v Speaker 1>for example, a corporate action. And I imagine if you

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<v Speaker 1>were to have a distribute a ledger of all the

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<v Speaker 1>securities and the corporate actions in one place and everyone

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<v Speaker 1>looked at it, it will cost us a lot less,

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<v Speaker 1>you know, to process, and you can do the same

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<v Speaker 1>in with the K Y c R A m L.

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<v Speaker 1>What kinds of workers, what kinds of skills are you

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<v Speaker 1>looking for specifically to join Pershing? Yeah, I you know,

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<v Speaker 1>it's a it's a great question. Uh that technology is

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<v Speaker 1>changing fast, our client needs are changing enough fast. Um,

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<v Speaker 1>so clearly we're looking for you know, what we call

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<v Speaker 1>full stack engineers, people who can do the user experience

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<v Speaker 1>as well as the back end as well as you know,

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<v Speaker 1>they need to be more sensitive to what's out there

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<v Speaker 1>in the marketplace, have a good understanding of what the

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<v Speaker 1>clients are expecting. So you know, you're kind of looking

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<v Speaker 1>at not just a pure technologist anymore. You're also looking

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<v Speaker 1>for people with some understanding of the clients and the products.

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<v Speaker 1>Thank you very much for joining us, and thank you

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<v Speaker 1>for having us here. Suresh Kumar is a senior executive

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<v Speaker 1>vice president and the chief Information Officer for b n

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<v Speaker 1>Y Melant. We are broadcasting live from Pershing's Inside Conference

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<v Speaker 1>at the Higher Regency Orlando, and this marks eighteen years

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<v Speaker 1>of insight, eighteen years committed to the success of advisors,

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<v Speaker 1>and we have over two thousand financial professionals from all

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<v Speaker 1>over the globe attendant. If you're listening to the Bloomberg

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<v Speaker 1>Radio