BNY: AI bet is paying off, client impact is 'measurable'

• Key insight: The Bank of New York Mellon's raised its full-year guidance, signaling sustained confidence that its push into AI deployment and on-chain financial infrastructure is translating into durable earnings momentum.
• Expert quote: "The way one gets disintermediated is when you don't invest, when you don't participate in the new thing." — CEO Robin Vince
• Supporting data: The bank posted record quarterly revenue of $5.7 billion, up 13% year over year and beating analyst consensus.

The Bank of New York Mellon is leaning further into AI deployment following a quarter in which its headcount fell 7% from a year earlier, amid the company's rapid adoption of the technology.

CEO Robin Vince — who has long been bullish on artificial intelligence — reaffirmed Wednesday his commitment to embedding AI "across the company." During a quarterly earnings call, he told analysts the nation's oldest bank has seen a positive return on its AI investments, with a "tangible and measurable impact across the entire client lifecycle."

Analysts honed in on the BNY's headcount falling 7% in the second quarter, despite revenue continuing to surge.

Chief Financial Officer Dermot McDonogh said the figure was "just an output" and emphasized that the bank continues to "invest heavily in talent."

"It's down 7% over the year, but that's as a result of everything. It's not necessarily a headcount target that we deploy," McDonogh said. 

In remarks at a conference in May, Vince said that the more firms embrace AI, the faster they will grow, and the more people they will employ.

On Wednesday, Vince said BNY's embrace of AI has led to better workforce management, which has enabled the company to increase the average compensation it pays to its employees.

"Ultimately, adoption and embedding in a company is going to be the differentiator for many firms on whether or not they're successful with AI," the CEO said. "We're AI optimists, and we believe we can use AI to power that growth."

Still, McDonogh said that BNY's AI spending is "quite modest" in the context of the bank's $4 billion engineering budget. The spending is strategically appropriate as the technology becomes "culturally" embedded at the "individual productivity level," he said.

'One of the defining opportunities'

Also on Wednesday, Vince highlighted BNY's commitment to leading the shift toward an "always-on financial ecosystem" and on-chain financial infrastructure. He characterized the trend as "one of the defining opportunities for financial services over the next decade."

"The way one gets disintermediated is when you don't invest, when you don't participate in the new thing," Vince said. "But we're leaning into the new thing and participating in that fully."

BNY announced on June 29 that it had expanded its relationship with global fintech Circle Internet Group to allow institutions to manage both their cash and USDC assets through a single platform. BNY also said it plans to expand support to additional stablecoin issuers and digital cash workflows in the future.

BNY expects to "be in this coexistent world of having these new capabilities with traditional capabilities" amid the transition toward on-chain finance, Vince said Wednesday. The firm remains confident that digital ecosystems will continue to grow, he said.

"Whether through real-time payments, tokenised assets, collateral mobility, or digital cash, our objective is the same: to help clients connect traditional and digital financial ecosystems in ways that improve efficiency, expand optionality and support growth through trust and resiliency," Vince said.

Trump accounts

In April, The Treasury Department tapped BNY — in conjunction with online brokerage platform Robinhood — to steward "Trump accounts," a newly launched retirement savings program for newborns. BNY was designated as the government's "financial agent," tasked with managing the initial accounts, and with developing and operating an online application that families can use to access the funds. 

The program didn't go live until July 4 but, according to McDonogh, showed up in the second-quarter results of BNY's securities services business. That segment posted $2.8 billion in quarterly revenue, up 15% from a year earlier, a boost that was helped by a 23% year-over-year jump in issuer services revenue.

McDonogh said the bank expects the financial contribution from the program "to kind of go sideways and tail off." However, he added that both revenue and expenses are "durable and will be there for the foreseeable future, albeit at a slightly lower level."

Second-quarter results

Between April and June, BNY reported a quarterly record of $5.7 billion in total revenue, up 13% from the same period last year. That brought the bank's earnings per share to $2.45, up 27% year over year and beating consensus estimates that placed the figure at $2.23.

On Wednesday, BNY substantially raised its revenue guidance for 2026. The bank now expects 10% to 11% more revenue than last year, revised from its previous guidance for revenue to rise by approximately 5%.

Like other Wall Street heavy hitters, BNY benefited in the second quarter from the market's "unique set of circumstances" and "supportive market backdrop," McDonogh said. He cautioned that year-over-year growth in net interest income and deposits will be difficult to match in the third quarter.

The bank reported $1.45 billion in net interest income last quarter, up 20% from the same period in 2025.