BNY Mellon Pershing’s new fixed income research, management and trading tool, BondWise, will help make fixed income workflows more efficient and could be used across the wider group.

On 12 September BNY Mellon Pershing announced the debut of BondWise on its NetX360+ platform to allow advisors to research and trade bonds and other fixed-income securities in real time. The tool was developed in collaboration with bondIT, a fintech that uses data science, artificial intelligence and machine learning technologies to create tools for the fixed income market.

John Goodheart, head of trading services at BNY Mellon Pershing, told Markets Media: “This is the first time that wealth managers can see liquidity aggregated on one platform that is very easy to use. There are over 200,000 CUSIPs and 2 million price quotes on any given day so it is real, rich, actual data.”

BNY Mellon first met bondIT in 2017 and although the firm thought the fintech’s technology was very interesting and compelling it was not prepared to move forward at that time. In April 2021 BondIT was chosen to take part in BNY Mellon’s accelerator program, which works with innovative technology companies to create solutions that support BNY Mellon’s clients and the global financial industry.

The tool allows financial advisors to generate dynamic portfolio proposals in real time, swiftly optimize portfolios and provide clients with detailed analytics and reporting using AI across the entire portfolio lifecycle. In December 2022 bondIT raised $14m in a new investment round led by BNY Mellon, with participation by existing investors.

Etai Ravid, founder and chief executive of bondIT, told Markets Media: “A user dashboard was one of the attractive things that we had even back in 2017 and the user experience has evolved.”

Goodheart said the user experience is critically important and he described the BondWise solution as an “absolute jump ahead” in how an investment professional is able to easily navigate the platform with real time pricing, supplemented with custody account data from the BNY Mellon ecosystem. As a result, entire portfolios on Pershing can be automatically transferred to the Bondwise platform.

Advisors can use the tool, for example, to create new bond portfolios or tweak portfolios based on parameters they set such as ratings or tenors. Once the advisor has reviewed the recommendations from Bondwise, the advisor just has to press a button for trades to be executed.

“We are talking about automation and being a one-stop-shop,” added Ravid.

Goodheart said the timing of the launch has been fantastic as increasing interest rates have led to more clients asking their advisors about fixed income, and many investment professionals are not experienced in the space after years of near zero rates.

“Our fixed income volumes in 2022 were 2.5 times what they were in 2021,” Goodheart added. “Our volumes in 2023 are double what they were in 2022.”

Electronification of fixed income

Ravid said that when bondIT was launched there was a very low level of electronification in the bond market, but this has accelerated.

Goodheart continued that the fixed income market is still in the early innings of electronification. BondWise allows advisors to  service end-investors electronically, and both improves the experience for advisors and their end clients.

“There is also great interest from ATSs and other liquidity providers to be able to interact with retail flow,” Goodheart added. “They are investing in technology to access that order flow that has historically been ignored.”

BondWise is currently being used in Pershing but BNY Mellon envisages that the platform will eventually be used across the group.

Goodheart said: “We think that there are opportunities with BondWise to improve operational workflows as there are a lot of opportunities to capture things more electronically.“