Custody banks

TradFi companies are making strategic investments in infrastructure to support the growth of tokenized assets

The Bank of New York Mellon had 117 different AI solutions in production at the end of September, Chairman and CEO Robin Vince said. That's up 75% from the second quarter.

More nonbank digital asset firms are applying for national trust charters, a development that many banking organizations oppose due to what they say is inadequate oversight, lack of congressional intent and no FDIC backstop.

Federal banking regulators outlined considerations for safely handling digital assets in a new guidance published Monday, which replaces prior statements on crypto that were withdrawn earlier this year.

The investment and custody bank beat Wall Street estimates on net income but missed on revenue expectations. An increase in fee revenue offset stagnant net interest income. Management expects more of the same for the rest of the year.

CEO Ron O'Hanley touted an "encouraging financial performance" at the $326 billion-asset custody giant due to asset inflows and a jump in income from securities and loans.

The New York-based company saw assets under custody and management jump, driving strong increases in both fees and overall revenues for the quarter ending June 30.

In correspondence with Rep. Andy Barr, R-Ky., the Federal Reserve and Office of the Comptroller of the Currency said the Securities and Exchange Commission's proposed safeguarding rule could change banks' custody businesses.

After seeing deposit increase over the second half of March, CFO Dermot McDonogh restated the New York custody giant's guidance for a 20% year-over-year jump in spread income, hinting the company might actually overshoot its target.

The custody giant benefited from rising interest rates, which helped offset choppy financial markets and a decline in fee income.