BNY Mellon Corp is a company well known for being one of the world’s largest custody banks. However, as is the case with any financial institution, they run into a few snags now and then. Earlier this week, BNY Mellon Corp hit payment troubles, as their task of moving trillions of US Dollars around the banking system is becoming more cumbersome. It is evident that new solutions are needed.
A Major Roadblock For BNY Mellon Corp
The banking system we all use to this very day is bogged down by inconvenience, delays, and archaic technology. Moving funds around the world takes days if not weeks for the average consumer. But even financial institutions are suffering from delays, as moving trillions of dollars around the banking system is becoming more cumbersome than ever before.
BNY Mellon is acknowledging that problem, as they hit a payment processing glitch yesterday. For the time being, it remains unknown how widespread this problem is, but it is safe to say that this is not a positive development. The institution offers payment services spanning over 100 currencies and several thousand correspondent bank accounts around the world.
Moreover, the group is responsible for maintaining US$26tn in assets on behalf of their clients. For BNY Mellon to hit a payment processing snag while controlling such vast amounts of financial means is a worst case scenario. Unfortunately, it is not the first glitch faced by the bank either, as another incident had occurred 18 months ago.
Processing clients’ payment instructions is the bread and butter of this bank, yet that is becoming quite problematic to execute these days. At first, it appeared that the bank’s connection to Swift was to blame, but it is uncertain if that was the cause of the issues to begin with. Either way, those problems were solved rather quickly, even though it caused significant inconvenience.
What is rather intriguing is how BNY Mellon executives highlighted the archaic financial system. In fact, no significant improvements related to US domestic payments have been made in the past four decades. It is due time that new technologies are embraced on a large scale, and blockchain technology may be the solution banks that have been waiting for.
Another option would be to work with digital currencies, potentially combined with a distributed ledger. Right now, cross-border transactions can take up to four days to complete. Moreover, the lack of transparency does not sit well with most of BNY Mellon Corp’s clients, adding only more fuel to the fire. This is a clear cry for new technologies, and another example of why blockchain technology matters.
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