Custody banks

Subhankar Sinha, the bank’s new head of blockchain, says its partnership with Bakkt is part of a larger effort to figure out what it would look like to be a custodian for digital assets.

Some banks have backed away from the technology, but Northern Trust, State Street and JPMorgan Chase are among those actively working on blockchain projects.

Money managers, which are critical to the success of State Street and Northern Trust, are aggressively moving cash into higher-rate products.

Bank of New York Mellon's clients shifted more of their deposits to higher-rate products. It was one of several trends that hurt the custody bank's bottom line.

The board of the Federal Deposit Insurance Corp. on Friday made several proposals meant to simplify post-crisis rules, prompting opposition from its most recent former chairman.

The company protects digital assets with hardware-based security, biometrics and quorums. Hedge funds are already signing on.

The company's fourth-quarter results were also stymied by costs tied to severance and litigation, along with investments in technology.

New CEO Ronald O'Hanley is pushing to reduce expenses, automate more functions and simplify the organizational structure.

The custody bank was very profitable, and it raised its cost-saving forecast for year-end, but its nearly 3% increase in third-quarter noninterest expenses prompted an investor backlash.

Earnings were bolstered by lower taxes and higher asset-servicing fees, but revenue was flat and analysts raised concerns about a shrinking deposit base.