The Bank of New York Mellon Corporation BK has been chosen by the U.S. Department of the Treasury's Bureau of the Fiscal Service ("Fiscal Service") to act as a financial agent for the Direct Express prepaid debit card program. The five-year agreement is set to begin on Jan. 3, 2025.
Details of the Program to be Managed by BK
The Direct Express prepaid debit card offers safe and easy access to federal benefit payments for roughly 3.4 million Americans. BNY Mellon has been selected by the Fiscal Service after an assessment of proposals from various financial institutions.
BK was picked due to its wide range of customer service alternatives which are better equipped to meet Treasury's specific customer base and boost the cardholder experience by offering services such as digital fund access, bill payments, cardless ATM access, chat, omnichannel customer service (including chat and text), online dispute filing, in-person authentication and more.
BNY Mellon will enhance digital payments, including contactless capabilities, money transfers, bill payments, emergency access to funds and more through its solid emphasis on client experience and comprehensive suite of services tailored to the program’s customer base.
Jennifer Barker, Global Head of Treasury Services and Depositary Receipts at BNY Mellon stated, “Drawing on our leading platform capabilities, we look forward to advancing the program's goal of providing high-quality financial services to individuals and communities throughout the U.S.”
Rationale Behind BNY Mellon’s Move
This move aligns with the bank’s revenue growth strategy as the services offered by the program will lead to higher fee revenues, which in turn, will aid top-line expansion.
BNY Mellon has been engaged in initiatives to boost its revenue growth. Earlier this month, it acquired Archer Holdco, LLC to enhance managed account offerings. Further, in September, BK obtained regulatory approval to offer exchange-traded funds crypto custody service alongside launching the Alts Bridge platform to bolster its alternative offerings.
BK’s Price Performance & Zacks Rank
In the past six months, BK shares have risen 35.6% compared with the industry’s 31.6% growth.
Image Source: Zacks Investment Research
Currently, BNY Mellon carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Collaborations by Other Finance Firms
Last week, The PNC Financial Services Group, Inc. PNC announced a partnership with GTreasury, a global leader in Digital Treasury Solutions. This new collaboration integrates PNC’s embedded banking solution, PINACLE Connect, with GTreasury’s treasury and risk management platform.
With this expanded partnership, PNC and GTreasury’s mutual clients can make their operations more efficient and streamline processes. The client can also avoid the swiveling practice that generally arises when using multiple partner platforms by integrating key PNC banking services.
Similarly, Lending Tree, Inc. TREE has partnered with Coverdash, the fastest-growing startup and small to medium-sized businesses (“SMB”) focused on insurtech broker.
This partnership should enable TREE to offer business insurance to its clients for the first time. This collaborative partnership broadens Lending Tree's range of financial products for SMBs, giving it a more effective and convenient way to meet financial needs and obtain business insurance.
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The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report
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