Strategic Issues Facing BNY Mellon Elysa Schwartz Robert Morris University MBAD 6990 August

Strategic Issues Facing BNY Mellon
Elysa Schwartz
Robert Morris University
MBAD 6990
August, 2018

Abstract
The purpose of this paper is to review BNY Mellon and the strategic issues facing the organization. The author has reviewed BNY Mellon’s history, market share, financial position, employee benefit and compensation plans, their stance on corporate social responsibility, technology and their culture. After reviewing BNY Mellon as an organization, the author has identified areas such as diversity and inclusion, technology and client perspective to as strategic areas to focus on. The author developed a strategic plan to present to senior leadership to identify the areas for improvement and how BNY Mellon can implement those changes. The goal of a successful organization is to be an employer of choice as well as the company of choice for clients.
Key words: technology, strategies, employee engagement,

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Introduction
Being an employer of choice can be defined by many factors. Being an employer of choice is beneficial to organizations so they can attract and retain the best candidates. Being an employer of choice is more than just offering higher pay compared to the market standards (Amara, 2014). Candidates are looking for a work culture which supports them. The following are some characteristics offered of an employers of choice: competitive compensation packages, additional monetary incentives, opportunity to career advancement, training and development, rewards and recognition, fairness, freedom and respect, access to information and employee communications, commitment, involvement, positive relationships with coworkers, work/life balance programs, and job security (Amara, 2014). BNY Mellon embraces and excels in most of the characteristics listed above. BNY Mellon is already an employer of choice, but in order to stay an employer of choice and use the status to the advantage of the company, we will identify where BNY Mellon can improve.
BNY Mellon employs over 50,000 employees across the globe and believes great things can happen when they all work together to achieve one common purpose (Vision and Values). BNY Mellon believes in four core values: client focus, integrity, teamwork, and excellence (Vision and Values). Client focus is about putting the client at the center of all that BNY Mellon does (Vision and Values). Integrity is about acting with the highest ethical standards for the company, their employees, and their clients (Vision and Values). Teamwork is about fostering collaboration, diversity and inclusion, and empowering employees to build relationships within the company and with their clients (Vision and Values). Excellence is all about setting the standard and leading the way for innovation and continuous improvement (Vision and Values). These values guide all decision making and interactions at BNY Mellon.
Company History and Profile
BNY Mellon was a merger of two major banks in 2007. The Bank of New York was founded in 1784 by Alexander Hamilton. It was formed after the Revolutionary War to help New York City bounce back from the state of disrepair (BNY Mellon BNYM Timeline, N.D.). T. Mellon ; Sons’ Bank was established in 1869 by Thomas Mellon and his sons, Richard and Andrew. In 1902, the name was changed to Mellon National Bank and Mellon joined the national banking system and then finally changed its name to Mellon Financial in 1999 (BNYM Timeline, N.D.). In 2001, Mellon Financial sold their retail business to Citizens Financial. Finally, in 2007, The Bank of New York and Mellon Financial merged and became BNY Mellon.
BNY Mellon holds over $33.5 trillion assets under custody and/or administration and $1.9 trillion assets under management for a total of $35.4 trillion. The total revenue is $4.2 billion which includes $1,519 million from the various lines of businesses consisting of Asset Serving, $581 million from Pershing, $418 million from Issuer Services, $321 million in Treasury Services, and $255 million in Clearance and collateral management. They are active in over 100 markets via sub custodian banks in six continents in 35 countries. Their total earning of 2018 Q1 is $1.14 billion or $1.10 per common share (BNY Mellon Reports First Quarter 2018 Earnings of 114 Billion or 110 Per Common Share, 2018). As mentioned earlier, Mellon Bank sold their retail business and the organization now provides investment services, investment management, markets, and wealth management. The investment services and management provide investment advice, portfolio management, administration of investments, and investment boutiques with their own personalized strategies. The markets segment provides foreign exchange, securities finance, collateral management and segregation, capital markets and prime brokerage services to offer solutions for clients to effectively manage their risk, capital and liquidity needs. Wealth Management provides investment management and estate planning to wealthy individuals (BNYM What We Do, N.D.).
BNY Mellon has four main competitors: State Street, JP Morgan Chase, Goldman Sachs and PNC. State Street, JP Morgan and BNY Mellon are all custodian banks. A custodian bank differs from a traditional commercial or retail bank in that it safeguards a firm’s or individual’s financial assets. They typically do not sell mortgages or personal loans or provide branch services like personal banking accounts and ATMs. Mellon Bank was a retail bank before the merger and sold those aspects to Citizens Financial. The Bank of New York also had retail branches and sold those to JP Morgan Chase. Goldman Sachs is an investment bank and focuses on trading. There was actually talk of Goldman Sachs purchasing BNY Mellon (Currie, 2018). This would mainly help Goldman Sachs to obtain more of BNY Mellon’s clients to trade through them. BNY Mellon’s clients currently have a wide variety of investment banks to trade through. State Street is closest with $32 trillion to the number of assets that BNY Mellon holds (Team, 2017). They both have similar products so clients sometimes move between the two. PNC Bank is a retail bank, but they are a competitor for employment at least in the Pittsburgh area. They are both in the top 50 employers of Pittsburgh (Top 50 Employers Allegheny County 3rd Quarter, 2017). They have similar positions so employees will sometimes go between the two banks after working for one for a number of years.
BNY Mellon has won numerous awards in the areas of technology, leadership, client services and the environment (Who We Are, 2018). BNY Mellon received the 2018 Hedge Week winner for best managed accounts, the NICA Nova award for innovation in technology, the 2017 Webaward for best investor relations website, and many other industry awards (BNY Mellon Awards). BNY Mellon is recognized in not only just the financial industry, but also through other employer awards such as the Dow Jones award for sustainability and environment leaders, the National Business Group on Health award for Best Employers for Healthy Lifestyles, The Times award for Top 50 Employers for Women, Randstad’s survey choice for Employer with Best Future Perspectives and many others. These all demonstrate why BNY Mellon is an employer of choice. These awards align with the branding of being “INvested In”. The four main areas of investment are clients and customer service, technology, employees, and Corporate Social Responsibility. Being invested in the clients is a typical goal of any company. The technology is a way to invest in clients so they are able to access their accounts quickly and the information is clear. The investment in technology is also important to the employees. An employee can’t provide top notch service to their clients if their systems don’t work as they should. BNY Mellon is using the corporate tax breaks to invest in technology as well as increasing the minimum wage at the company to $15/hour (Baer, 2018).
Compensation and Benefits
BNY Mellon offers a generous and extensive benefits package to employees. The company currently offer two types of medical plans to employees through two different national health care providers, Aetna and United health care (Healthhub). Plan HRA (health reimbursement account) offers a lower deductible and out of pocket cost, but has a higher monthly premium. Plan HSA (health savings account) offers a lower monthly premium, but a higher deductible and out of pocket cost (Healthhub). BNY Mellon contributes to employees’ health account deposits and offers additional incentives such as premium reductions and additional health account deposits for employees and their spouses/domestic partners if they participate in certain wellbeing activities (Healthhub). BNY Mellon supports employees financially by providing salary based health coverage plans. The less money an employee earns, the more BNY Mellon covers of their medical plan. This is just one perk to the extensive compensation and benefits packages. BNY Mellon also offers dental and vision plans for employees and their families with multiple options to find the best fit for their family. BNY Mellon believes in a healthy work/life balance for their employees. BNY Mellon offers a generous amount of time-off throughout the year with twelve scheduled holidays, two personal choice days, generous sick time available, and at least two weeks of vacation (depending on your position and tenure with the company). All benefit eligible employees also have the option to purchase an additional week of vacation to use during the year (Healthhub). Many employees also have the option to occasionally work from home or flex their time.
BNY Mellon believes in supporting their employees’ financial wellbeing and helps employees prepare for retirement. The 401k plan is facilitated through Voya and matches employee contributions up to six percent that is fully vested automatically (Healthhub). BNY Mellon also contributes an additional two percent of an employee’s base salary every year and the investments are fully vested after three years with the organization (Healthhub). BNY Mellon continues to support their employees’ financial wellbeing by offering employees free financial planning through Ayco, a Goldman and Sachs company (Healthhub). BNY Mellon has five onsite health centers operated by Premise Health at their offices in New York, Jersey City, and Pittsburgh (Healthhub). The onsite health centers offer convenient care at lower costs for employees. BNY Mellon employees have access to a wide variety of non-traditional benefits such as telephonic and onsite health coaching, employee assistance program counselors, back-up dependent care, onsite health centers, multiple gym discounts, and gym reimbursement programs. BNY Mellon also utilizes leading vendors to facilitate these programs such as Doctor on Demand, Premise Health, WebMD, Virgin Pulse, CVS Caremark, Aetna, United Health Care, Best Doctors, Castlight, and Beacon Health (Healthhub). BNY Mellon periodically conducts reviews on pay practices to stay competitive in the industry (Pay Equity at BNY Mellon, 2018). In their most recent review, they focused on gender equity. The global analysis revealed that female employees are paid at ninety-nine percent of their male counterparts (Pay Equity at BNY Mellon, 2018). The analysis also looked at how U.S minority employees are paid compared to U.S non-minorities (Pay Equity at BNY Mellon, 2018). This revealed that minority employees are paid on average more than ninety-nine percent of what non-minority employees are paid (Pay Equity at BNY Mellon, 2018). BNY Mellon is committed to providing employees equal pay for equal work and staying competitive with the pay practices. This is just one way BNY Mellon demonstrates themselves as an employer of choice.
A non-traditional benefit that BNY Mellon has is the employee resource groups. They are open to all employees. They allow employees to meet employees from other departments. They also provide leadership opportunities that may not be available in a regular job. There are mentoring programs as well offered by these groups. Some of the resource groups have joint events with other local companies to allow for networking and resource sharing.
BNY Mellon sponsors the below ERGs (Employee Resource Groups, N.D.):
• GENEDGE taps into and shares the knowledge capital, energy and range of talents within our diverse, multigenerational workforce to solve business problems.
• HEART increases awareness and education around the needs of people with disabilities.
• IMPACT provides an invaluable resource for the recruitment, retention, professional development and advancement of multicultural employees.
• PRISM fosters an open and supportive environment for lesbian, gay, bisexual, transgender, queer/questioning and ally employees (LGBTQA).
• VETNET serves as a resource for the recruitment, retention, professional development and advancement of military members as they transition to new careers and civilian life.
• WIN promotes a culture of leadership and sponsorship to recognize and support the professional development and advancement of our women.
Another area that BNY Mellon is INvested in is CSR. On the environmental front, BNY Mellon has become carbon neutral as of 2015 and they are pursuing green building certifications (Commitment to Environmental Sustainability – People Report, n.d.). They are focusing on printing less and changing their lighting to only be on as needed with motion activators.
An aspect of CSR that contributes to the community is their Community Partnership program. Employees gain project management and leadership skills by leading these events. BNY Mellon offers a company match of $20 per volunteer hour, a monetary match if employees collect monetary donations or even a monetary match for product donations. Employees are allowed to use three paid days a year to volunteer for an organization, or they are welcome to volunteer outside of working hours. The organization must be a 501(c)3 as determined by the IRS.
Some types of projects that BNY Mellon employees can participate in include the below:
-charity walks such as the Best Buddies friendship walk, or the Light the Night walk. The company either matches the hours that volunteers assist with the event or matches donations collected.
– assisting with one-time events such as The Art of Wine and Food gala to benefit HEARTH or a birthday fundraiser for Beverly’s Birthdays.
-clean up events such as painting and cleaning at the Boys and Girls Club
-organizing and running proms for groups such as Best Buddies
-product drives such as a coat drive, or collecting diapers for Western Pennsylvania Diaper Bank and the company matched .50 / diaper collected in addition to the actual products donated by employees.
-envelope stuffing, and general office help. This could be a one-time project or on-going depending on the organization’s needs.
-VITA income tax return assistance for low income clients.
There are other types of projects too, but this is just a sampling. Community Partnership provides an employee additional networking opportunities to meet with people in other departments that share their passion for a charitable organization. Employees who may not otherwise be able to afford to give a monetary donation are able to donate their time and are thankful for the company providing the monetary donation to help out the organization. Organizations require volunteers’ time to be successful, but most also require money to run programs.
BNY Mellon is a leader in the industry as a bank and an employer of choice. BNY Mellon believes their employees are truly their greatest assets and support this by investing in their employees. The extensive benefits program and resources that they offer their employees is just one way that BNY Mellon demonstrates this. BNY Mellon recognizes that their employees spend a lot of their time at work and encourage employees to network internally through their employee resource groups. The employee resource groups have executive level support when hosting events and engaging employees to participate in programs during the work day. BNY Mellon has created and fosters a culture that is supportive of their employees and embraces several characteristics of an employer of choice such as: competitive compensation packages, additional monetary incentives, opportunity to career advancement, training and development, rewards and recognition, fairness, access to information and employee communications, commitment, involvement, positive relationships with coworkers, work/life balance programs.
Technology
BNY Mellon already utilizes

Recommendations and how to implement them within the organization.
1. Manager training:
a. Online training reinforcing the values managers should be embracing within the organization
b. Online and in-person training in regards to benefits, wellbeing programs, and non-traditional benefits
c. Create and conduct training for new programs. Managers will be key in getting their employees to engage in new programs. We should train and educate them first.
2. Improve internal communications:
a. Increase non-traditional means of communications such as post cards and elevator/hallway posters.
b. Keep email communications simple, clear and easy-to-read for employees
c. Use multiple channels to communicate events, programs and resources; emails, post cards, digital screens, elevator/hallway posters etc.
3. Promote BNY Mellon as an employer of choice externally
a. Recruiters can leverage BNY Mellon as an employer of choice when recruiting top candidates.
b. Use employee testimonials in regards to BNY Mellon as an employer of choice on BNY Mellon’s external job posting site
c. Promote BNY Mellon on LinkedIn as an employer of choice to attract candidates.
d. We have a strong internship program with several universities and should introduce BNY Mellon as an employer of choice to students interested in the organization.
Conclusion
Overall, BNY Mellon is an employer of choice. They offer competitive compensation packages, many non-traditional benefits, learning and career development opportunities, a work/life balance and are passionate about engaging their employees in the programs and resources available. Every company has room for improvement to continue to be an employer of choice in the industry. BNY Mellon has shown their strengths of pursuing these learning opportunities for continuous improvement. The company has a promising future to continue to be an employer of choice.

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