00:00I do want to start off with the digital asset side, and we'll get to more your core competency here,
00:04but this kind of just struck me when I saw it, because I know we've heard from the CEO and
00:08the CFO
00:08talk a lot about doing a little bit more in this space.
00:12I mean, if you're going to be a custodian, you're custodian for all assets.
00:15How does this sort of expand what you do?
00:18Well, the announcement with Galaxy is just one of many partnerships that we've recently gone to market with.
00:24It allows us to stake, to do staking for assets that are under, digital assets that are under custody.
00:29But what I would say, if you just step back for a moment on digital assets more broadly,
00:34is that there's not a client conversation today where digital assets or tokenization doesn't come up.
00:40And whether or not an asset manager is about to launch a product next week or in six months,
00:45they want to know what's going on in this space.
00:47So the conversation has really become mainstream.
00:51And last week, we also announced a new capability.
00:54It is called Digital Asset Transfer Agency.
00:57I don't know if you know anything about transfer agents.
01:00Probably don't.
01:01But they sit behind every fund transaction.
01:03And they're the books and records.
01:05And they create the shares of funds.
01:07And so we now do that on-chain.
01:10And the reason why that's very important,
01:12that the books and records of a money market fund, for example, is on-chain,
01:17is because suddenly that makes the money market fund available for 24-7 settlement.
01:21And it also makes it mobile.
01:23So you can actually use a money market fund for financing a transaction on the weekend, for example.
01:29As you expand, and some of this has just come with the dynamics that we've been seeing in the industry,
01:35a broader industry.
01:36And obviously, they've come knocking on B&Y's door because you've been doing this for a gazillion years.
01:41I am curious, though, about just the fee pressure.
01:44I mean, there are a lot of competitors in this space as well.
01:46How do you sort of maintain that growth but at the same time maintain some semblance of profitability of what
01:52you're doing?
01:53Well, at B&Y, we have had a lot of success over the last several quarters
01:59and have announced a pretty incredible performance with that organic growth.
02:05I think we've had 10 consecutive quarters of organic growth.
02:10And, look, fee pressure is just part of the business.
02:12But if you service clients well and if you are competitive and differentiated in your offering,
02:18which is exactly what we're doing along the lines of DA or digital assets as well as many other innovations,
02:24then clients are willing to pay for service and pay for performance.
02:28With regards to the servicing infrastructure, particularly in the realm of alternative assets
02:33and the idea that you're starting to see more individual investors gravitate to alternative types of products,
02:39whether it's in a wrapper or as a standalone,
02:41how much has that business grown?
02:43And have you had to make significant changes to your infrastructure to accommodate this or not?
02:48So alternatives more broadly, private markets specifically, is definitely a growing segment of the market.
02:56And it's just becoming ultimately a staple of an investment portfolio.
03:02Whether it's for enhanced yield, whether it's for further diversification,
03:06it's an important component, really, of any investment portfolio.
03:10And so if you're an asset manager, you're kind of thinking about,
03:13gee, first of all, do I have those products in my portfolio, in my repertoire?
03:17If not, you've seen some tie-ups of different asset managers,
03:21traditional asset managers and alternative asset managers.
03:24There's a question, too, around how do you access that space?
03:28The distribution channels are often different for alternatives.
03:32There's also a growing attraction of alternative and private market exposure
03:37for more mass affluent and retail investors in different wrappers.
03:41And then the last thing I'd say is if you're the investor on the investor side,
03:45there's a big push to want to see your public and your private market portfolio together
03:51in one single pane of glass so that you can look at your exposure
03:55and your attribution across both.
03:58So as the market is getting more complicated, it is partners like ourselves
04:03that can help to certainly develop and deliver those holistic investment solutions
04:08across the public and private markets.
04:10With regards to where you see growth going forward,
04:13is it going to be kind of in that space with regards to private,
04:17and when I say alternative, I'm talking about private assets
04:19and the broadening of that market, or is there somewhere else you're looking?
04:23Certainly private markets will continue to be an important key growth area.
04:28ETFs continue also to be a very important growth area,
04:31and especially active ETFs, likewise the wealth segment,
04:35and of course, as we started, digital assets.
04:38Digital assets.
04:39Final question, and I know Robin Vince has talked a lot about
04:41his own deployment internally of AI and this newfangled technology.
04:45I assume in your business, you have to be all in on that.
04:48Absolutely.
04:49Absolutely.
04:50And we were an early adopter of AI.
04:53Frankly, Robin is evangelistic about it.
04:57Yes.
04:57He used to come to...
04:58That's what I've heard, yeah.
04:59He used to come to our meetings and talk about vibe coding on the weekends.
05:03So, I mean, it got us all very, very interested.
05:06And look, it's about creating more capacity.
05:08It's about reducing risk.
05:10It's about servicing our clients better.
05:12We do have digital employees now, about 180 of them.
05:16They have names, funny names.
05:18Okay.
05:18Email addresses.
05:20Okay.
05:20They have access to our systems.
05:23Yeah.
05:23They're listed in our phone book, and they do things like payment repair,
05:27answer custody queries, help with client onboarding.
05:31And it's just all about...
05:32Of course, they're supervised by humans.
05:35But, of course, it's all about being faster, more efficient, and servicing our clients better.
05:40A year from now, do you think that those 180 will be a lot more than that?
05:44Probably.
05:45We'll scale up as appropriate.
05:46We'll scale up as appropriate.
05:46We'll scale up as appropriate.
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