On the latest Inside the ICE House Podcast Episode 528, Emily Portney, Global Head of Asset Servicing at BNY, said asset servicing, long viewed as a back-office operation, is now taking on a more visible role, and explained how it is helping shape the future of finance.

Portney said asset servicing is largely invisible to most retail investors, even though nearly anyone who owns a mutual fund, ETF or money market fund likely relies on it in some way.

“We are safeguarding the assets of the fund,” she said, referring to custody services. “We are valuing and striking a NAV or a net asset value that you can trade off… We are often providing all of the investor services.”

She said asset servicers handle much of the infrastructure investors depend on every day, often without realising it.

“If an asset servicer is doing their job right, you don’t really hear much about them,” Portney said.

She said that low profile may now be changing: “Lately what I would say is that I think asset servicing is becoming pretty cool.”

Portney said the rise of artificial intelligence, digital assets and tokenisation is pushing the sector into the spotlight. While many focus on the end products, she said much of the real work happens deeper in the system.

“If you want to tokenize an asset, you actually really need to understand how the rails work and how you would settle that asset, how you would trade that asset, how you might use that asset for financing.”

She added that shift is giving firms like BNY a larger strategic role as markets modernise.

According to Portney, asset management itself is becoming more complex and less clearly divided.

She said traditional fund managers are moving into alternatives, while private market firms are expanding into products aimed at a broader investor base. She added that ETFs have also evolved well beyond passive equity strategies. “Those lines are blurring,” she said.

Portney said clients increasingly want providers that can support multiple structures, products and investor types through one platform.

“It does mean that you have to start thinking about your world a bit more horizontally and more as a platforms company,” she explained.

She stressed the rapid growth of private market, from private credit and infrastructure to real estate and private equity, has also changed the demands placed on asset servicers.

“Each of those are almost like their own asset class,” Portney said. “They come with their own toolkit, their own flavor and you need domain expertise.”

She said unlike listed securities, private assets do not have transparent daily prices. Valuations can be monthly or quarterly, while subscriptions, redemptions and capital calls are often more manual and tailored to each fund. “Those processes are very, very different,” she said.

Portney added that service providers now need to focus not only on fund managers, but also on making those processes easier for end investors.

She also said digital finance has moved into a new phase.

“It feels like at least for digital assets, we’ve really reached a tipping point. The conversations are very mainstream,” she said.

Portney said BNY already provides custody for digital assets and serves as reserve custodian for several stablecoins. She added that the firm is also working with fund companies to tokenize products, beginning with money market funds and now ETFs.

She said those developments could support 24/7 settlement, faster collateral movements and smoother cross-border payments. “You suddenly could think about a world where two investors can actually interact with each other on chain,” Portney said.

She stressed that traditional systems remain dominant: “There are trillions of dollars in funds that are still on traditional rails… and they will continue to be done that way.”

Portney said BNY’s role is to help connect old and new systems.

She said artificial intelligence is another major focus for the bank.

Portney said BNY has spent more than three years building internal AI capabilities, including a platform called Eliza, named after Eliza Hamilton.

She said the system gives employees access to more than 40 AI models for tasks such as research, coding and workflow support.

She added that the bank has also created around 150 “digital employees”, AI-powered agents assigned IDs, email accounts and system access. “We onboard them just like we onboard a human being,” Portney said.

She said these tools are already being used for data extraction, payment repairs, anomaly detection and fund oversight.

“Now it’s about reimagining, rewiring, rethinking how you did things in the first place,” she said of the next stage of adoption.

Portney said she has also built an internal following through her weekly “Quick Takes” emails – short Monday messages sent to staff with personal reflections on family life, travel, mistakes and everyday observations.

“It’s always short… and it’s always, most importantly, personal. It is not corporate,” she said.

Portney said she began writing them after taking over the division as a way to connect with employees across a global business. “It has really provided that connectivity to a very broad organization and an authenticity and a vulnerability that I think everyone can relate to.”

Looking ahead, Portney said future leaders in asset servicing will need to combine agility, trust and the ability to solve increasingly complex client challenges. “That ability to evolve and be nimble really is going to be critical,” she concluded.