If volatility increases in the coming months and maybe years, active management is going to take center stage, said Charles W. Scharf, chairman and CEO of BNY Mellon.
“People care about performance, first and foremost. You have to deliver,” Scharf said “As the market gets more volatile, active management will be more valuable to both clients and funds.”
Scharf, a keynote speaker at the BNY Mellon, Pershing Insite18 conference in Orlando on Wednesday, said the financial industry and financial technology are moving forward and financial institutions have to keep pace to remain relevant.
“If you just keep doing what you are doing, a little bit better each day, you will be left behind,” Scharf told the audience of 2,500 financial professionals attending the 20th annual Insite conference. “You have to change. It is not optional.”
Using artificial intelligence is one of the key elements of change, he said. “AI has to be used to add to the human element in businesses,” he said.
Scharf cited blockchain as one example, noting the technology will eventually mature and be much cheaper. “It is not ready yet, but you have to e involved now” to keep up with the changes, he said.
“There is an opportunity here to think differently about how we move money and securities,” Scharf said.
He cited his four years on the West Coast as CEO and director of Visa Inc. as an example of the kind of change business leaders and financial professionals have to be ready to embrace. At Visa, Scharf was recognized for transforming the firm into a technology-driven digital commerce company.
“I was amazed at the number of people out there who wake up every morning thinking [about] how to be disruptive in their industries. Most are going to fail, but that’s what drives the West Coast,” he said. As a business leader, you have to look for the ones who will succeed, he said.
“My experience at Visa taught me that as a leader you have to explain why you have to change. We were the biggest payment company in the world [and yet] we had to rethink the ecosystem and how we wanted to position the company,” he said.