The Bank of New York Mellon Corporation (BNY) Earnings Call Transcript & Summary

We're going to get going here. Hope everyone is doing well. Representing BNY Mellon is Emily Portney. A quick bio of Emily. Several years at JPMorgan to Barclays, where you were the CFO of an international division. BNY Mellon, Head of Client Services in the Asset Servicing business. Then, of course, famously, CFO, great job. And now back in the Asset Servicing business as the Global Head of Asset Servicing, which is incidentally 38% of all of their revenues. So very happy to have you on the stage.

Thank you.

And so in your new role, this is, as I mentioned, a return to the business for you. So I'm curious to what extent the business has changed since you were away? And I guess you've probably been talking to clients. So what are you hearing from them and...

Just a couple.

Yes. I see your LinkedIn. So Dubai a couple of weeks ago. You've been all over.

It's about 15 countries, and of course, all over the U.S. as well. So seeing employees and clients. And it is an interesting vantage point having been very intimately involved with Asset Servicing a couple -- 5 years ago and then now coming back in and having been in this seat since February. And I guess I would highlight probably 5 trends that -- a handful, 5, that are pretty key as I make the rounds. So first would be just the confluence of market factors and trends that are just driving more business our way and more opportunities for us to provide value to our clients. And of course, whether it's compression of management fees and margins, whether it's the M&A activity, the ongoing M&A activity that we're seeing in our own client base, that results and drives clients to look at consolidating service providers. Of course, that's all about efficiency and scale and simplicity, pricing power. And also in light of the pressure is just more opportunities for outsourcing. So clients certainly have an appetite to outsource things that perhaps before they just wouldn't -- 5 years ago, certainly 10 years ago, would not have considered. And so all of that is helpful and provides opportunities for us. The second major trend is just the continued, ever-increasing importance and allocation to alternatives. And I don't mean hedge funds, but really private markets. We're seeing a particular growing interest. And in the credit space, in the private equity space, of course, we compete across all, real estate infrastructure, et cetera. But I would call out credit and private equity as key areas, especially right now in light of the market backdrop. The third trend I'd highlight is the importance of being vehicle-agnostic. And what I mean by that is we're all reading about mutual funds converting to ETFs. We've had several clients who we've helped to do that where there's approvals in front of the SEC for an ETF sleeve in a mutual fund. We're seeing the importance and interest growing in SMAs, particularly retail SMA and UMAs, and that very much so also thinking about that from as people think about the distribution of alternatives-type products, especially for the retail market. So more and more, it's just -- it's all about the strategy and the vehicle -- that we have to be agnostic to the vehicle and the [ wrapper ]. And that does have implications around how we think about how we're organized instead of separate silos. Fourth major theme, distribution and especially the importance -- ever-increasing importance of retail distribution, and very much so in the United States. We're really fortunate at Bank of New York Mellon, we have a business, Pershing, that offers -- that has a vast -- it's connected to a vast network of RIAs. And in fact, in that business, we distribute in excess of $2 trillion of money market funds, mutual funds, ETFs, liquid alternatives on behalf of our clients and their clients every single day. So I mean that is a really important thing that we're hearing. And the last thing I'd highlight was just data. Data, data, data. And data was a theme already, call it, 5 years ago. But data now is ever more important. And really, in my mind, when someone -- a client asks about data, it's really about help me unlock the efficiencies in my own operating model. Help me transform my own operating model to become more efficient.

So maybe you could talk about how these 5 trends are forming. Where you're focusing your time, sort of the strategic direction that falls out of that as you think about those trends?

Sure. And I would talk about our strategy is just really an ongoing evolution because we've obviously been investing through the cycle in Asset Servicing. It is, as you said, Dick, our largest business. And when I think about it, I'd probably -- when I talk to my team and I talk to clients, I break it down to like we have 4 -- there's 4 pillars of our strategy. So first pillar, double down and continue to invest in the core, our core capabilities, and client service. You've got to be there for your clients every day, day in and day out. That's what allows you to ask for more business. So in that category, you'd put things like continued enhancements in automation to corporate actions and tax processing, which are obviously complicated and somewhat manually intensive processes, NAV oversight tools. We're leveraging AI and machine learning in our call centers. We're developing and forcing, to some degree, more standardized instruction capture on behalf of our clients. So it's all of those kinds of things. Second would be investing in growth. And of course, we, like I said, have continued to do that through the cycle. ETF servicing has been a big area of focus, and I would argue that we have a best-in-class platform. That is what our clients are telling us and it's as demonstrated by some of the more recent wins. And we will continue to invest there. Alternatives, as I said before, it's an area of the market which is less standardized. So there are more of bespoke solutions. And so we're investing a lot there to ensure that we can service our clients and we are trying to push for some standardization, if possible. And the other thing alts, I'd say is really we're now very focused on tools for the LPs, where traditionally, we've been more focused on tools probably for the GPs. Data, data management, as I said before. We have a 30-year history in data management. We have a data lake that -- and now we have a Data Vault. It is in -- it's live. It's in the market. We have several -- many clients, large clients. And we're helping them to take their investment data, combine it with third-party data and manage it, synthesize it, sanitize it and use it for analytics that help them generate alpha. And the last thing I'd say really in growth is using AI for things that provide also alpha for our clients. So we have a predictive settlement analytics capability. Helps you to predict fails, very important as it relates to sec lending and other things. We're leveraging AI actually to manage our own liquidity, and that is something that we can actually help clients do as well. So those kind of growth areas. Third, margin efficiency. We are -- we've committed -- Robin is talking a lot about bending the cost curve, and you can see that we already are. And of course, that takes the form of eliminating or automating manual processes, retiring legacy platforms, those sorts of things. Another area that we're extremely focused on across the firm is just working better together across the businesses. So doing it once, investing once and doing it best-in-class across the entirety instead of doing it and diluting it and doing it many times. Think billing, KYC, onboarding, call centers, those sorts of things. And the last thing I'd say on efficiency is we've gotten much more sophisticated on pricing, and frankly, more -- tighter controls. And so we've really forced ourselves to think about what is standard, what is not standard, are we billing for nonstandard, are we billing for extras. And by the way, also using fees to influence better behavior on behalf of our clients, eliminating faxes and those sorts of things. And the last pillar is talent and that's, of course, incredibly important. We've been simplifying the organization. We've been attracting great talent from -- at all different levels, as seen by recent hires. And also, we've been investing in our junior talent. Our campus recruiting pipeline is bigger than it's ever been before. It's 1,000 recruits. Next year, we're doubling that. So really also investing in recruiting and training and development of our people.

Wow, that was comprehensive. So when I think about BNY Mellon, you're in more lines of business than one traditionally thinks of vis-a-vis the trust and custody peers. Can you sort of flesh that out a little bit for us? Like what does that translate to in terms of the products that differentiate you when you're going to talk to a prospective client? And like what is the broader set of solutions that you would provide that perhaps others wouldn't?

Sure. Look, I've always been a strong believer in the diversity and unique assets we have at Bank of New York Mellon. In fact, as CFO in December of '21, we resegmented. Robin and myself sat at Goldman and we introduced our resegmentation. A lot of that was to showcase all of the different assets, unique assets, that we had that I think personally were probably overshadowed a bit by the size and scale of Asset Servicing. So we've got 3 segments: Investment and Wealth Management; Securities Services, which is not just Asset Servicing; as well as Market and Wealth Services. And I think something we -- certainly, as a result of those very unique assets and so do think Pershing, think we're the sole clearer of U.S. government securities, think we're the only trust bank, if you will, that has a whole payments business. So we call ourselves trust++. Robin likes to talk about it that way. So really, we've gotten much better at bringing the whole firm to our clients and thinking about solutions, not products. And frankly, when I visit a client, I talk to them in an open-ended way. What are your pain points? How can I help you? What are you struggling with? And that opens a very different conversation around solutions. And if I think about us historically, like we've always been pretty good. Assets, you sell custody and you upsell to fund accounting or something else. Or of course, when you go in for custody, you ask for sec lending and you ask for FX. Well, now all of our relationship managers and salespeople are incredibly well versed in our financing and liquidity solutions platform. And as a reminder, we touch, I think $1.3 trillion. We have a liquidity ecosystem, whether it's our own deposits, short-term financing solutions or our own money markets and -- or money markets on behalf of our clients that we touch every single day. So now especially in this rate environment, that's become very, very important. That leads to conversations, for example, also around collateral management. We're working more closely with Corporate Trust. We have an enormous loan administration business, and we think about that and tying that together when we go out and pitch alternatives servicing, especially in the credit space. Like I said, distribution, especially in Pershing, has become a really valuable asset. When we go out and talk to investment managers, our eyes light up when you talk about the access that we could provide them to RIAs across the United States. And by the way, we do all of this in a very unconflicted way and that's what's -- another very unique selling point for Bank of New York. We don't have our own RIA kind of huge network that's competing directly. We don't have a credit card business that makes us nervous about selling our real-time payments, for example. Two other quick differentiators I'd just highlight. One is open architecture. We've been talking about open architecture for some time. And that's not just in terms of OMS integration, but also middle and back-office services, too. We use kind of best-in-class. We plug in and then offer that to our clients so they don't have to plug in directly. And data. Again, I think I covered it, but we have a long history in data management. We have a very strong and robust product and more and more, that's also a competitive advantage.

So it sounds like this opens you up to a broader sort of revenue pools. Could you sort of maybe map that a little bit into how you think about the revenue pools for your business?

Sure. So I guess I would -- when you say revenue pools, I kind of think about, to some degree, kind of organizational structure and how we think about our P&Ls, if you will. And what is interesting, so we have 3 products and I'll go through those, and we have 4 client segments. But what I will say is that more and more clients are buying product on a bundled basis. So to some degree, the fact that we have 3 products is somewhat irrelevant if they're buying things on a bundled basis. And likewise, our clients are merging into each other. So as you all know, I mean, long-only traditional asset manager becoming more active in the alts space and just looks like an alts manager. An insurance company actually is now looks like an investment manager. So it's all blending. And so that's just a key theme. But when I think about how we're organized, we do look at -- we have 3 products. So there's custody, which also has trust and depository. We have our fund services. But actually within fund services is 5 separate businesses: it's Fund Accounting, it's Fund Reporting, it's ETF Servicing, it's Alternative Servicing and it's Transfer Agency. And we do actually look at each one of those businesses. And then the third line would be middle office outsourcing. And by the way, like I also think about Markets as part of our business. I mean it's just part and parcel. We're hand-in-hand with our Markets colleagues selling FX and sec lending and other liquidity solutions, frankly, outsourced trading. So it's all of these things are things that we own and develop and sell together. It's true that as of today, what you would think of traditional back office services are kind of the majority of the revenue base. And so I would just think custody and traditional fund accounting. But many areas are growing at a faster clip, call it, high single digits. So whether that's, again, ETFs, whether that's alternatives, whether that's middle office outsourcing, whether that's data, those are parts of the business that are growing much faster. And also, just when we talk about the front -- competing in the front end. As I said before, we're open architecture. We don't believe in owning an OMS ourselves. Our clients, some of the largest clients in the world, are using many order management systems because of different asset classes and different needs. But we absolutely are competing in the front -- what I'd call the front office space. And we did just launch outsourced trading. We were already doing it, the foundation was the trading that we do on behalf of our entire Investment Management business. So it was already alive and there. And we've just signed on, I think Robin talked about it in -- at earnings, a very large European asset manager. So continuing also build out capabilities there.

So that's sort of a good segue to cutting revenues or the drivers of revenue in a different angle. Could you help us with what percentage of the revenues would you say are transactional in nature versus up and down with markets? That's always kind of a mystery. Like when I see the market go up, should I -- to what degree should I get happy because...

Yes. understood. Well, so about -- when you talk -- and this is just Asset Servicing. So about 50% of our fees are balance driven and so priced off of market levels. Call it about a little over 1/4 of our fees are transaction- or volume-driven and then the remainder would be what I call account-based or could be a flat fee. And specifically, I think -- there's some interest in what our transaction fees are. Those are things like trade settlements, buys and sells, redemptions and creation activity. You charge by the transaction. It's certainly fair that over the course of this year, transaction fees have been down, call it, about 2% or so. And that's not surprising, given risk-off behavior, the geopolitical backdrop, the lack of volatility in certain parts of the business. And -- but that has been more than offset by net new business. So I would just say over the long haul, of course, we're very much correlated with market levels. But certainly, there's other components of our fees, which are -- I'd like to think of them as diversification, it's based really on transactions and work involved, if you will.

Yes. So looking from the outside at the company, market being one of them. And you just explained why it's a complicated KPI to judge what the forward looks like. But what are some of the other indicators that those of us on the outside could get a feel for, like how the business is doing in between reporting periods? What do you look at? And of that, what is a subset that we could look at?

Yes. Sure, sure. And look, I understand, especially as CFO, the want for more KPIs. And we've been talking and working on that in what we can -- more things that we can disclose. But by the way, we have a lot of KPIs that we do look at every day, every week, every month. In fact, we have monthly business reviews with Dermot and Robin and we're constantly looking at various KPIs. And to give you a sense of some of them, some of them [ are ] disclosed, some of them are more mature than others. But when you think about top line and kind of health of revenues, we certainly look at sales wins and mandates versus a plan versus last year. We break it down by segment, et cetera. We're looking at average margin on new deals, and that's quite important. We're looking at lost and repriced trends and whether they're trending up, trending down and is there a particular product or segment. So those give you a few things on the top line. When it comes to efficiency and progress on expenses, we do look at unit costs by product, of course, trying to drive those down. We look at NAV accuracy and timeliness on a daily basis and not against a general SLA, but against our clients' SLAs. We look at time to onboard a client because, obviously, that translates into revenue recognition and how fast you can recognize the revenues. We look at client profitability, compare that, call it, 12 months after a client has been onboarded versus what the deal model said and know what's different. So we have a lot of KPIs. And the only thing I'd say, and this is more as a former CFO, is that KPIs need a context. So not everything can just be understood without any context. And so of course, we also measure AUC/A and revenue to be installed. Of course, we do. But when you look at that and if it takes -- if it's a complicated deal and it takes 12 months to onboard until that goes live, a lot can change. Market levels can change. Volatility could change. Balances could change because of the interest rate environment. And so some of that is -- you can say it at the time, but what that actually means in terms of revenue recognition could be different if you don't have the context.

Yes. So that's good. We have a wish list now for Marius. We've got all these KPIs. You got that, right? Okay. So let's talk about revenue from a different sort of slice. How do you size like the client wallet? Like where the potential growth opportunities are? Like we could think of it in terms of new clients, new business from existing clients, stealing business from -- getting people to outsource, as you said, in the beginning. That's one of your 5 priorities.

Yes. Look, it's all of the above in terms of existing and new. And I talked about new is like you could sell new product to existing clients or you can have a totally new relationship. I mean, the first thing I'd say is it goes without question that retaining existing clients is by far the cheaper and most important thing that we can do. And we do have very, very healthy retention stats. So that's, of course, important. And we are seeing healthy growth in both -- in what I just said, basically new product to existing clients as well as winning totally new relationships. And we've exceeded our sales goal this year. Wins are up about 20% year-to-date versus last year. Our pipeline is, frankly, stronger than it really has been at any other time. And we believe we're taking away business from our competitors. And so to me, it's all of the above and we will continue to focus on all of the above. Likewise, we talked about already how a trend towards outsourcing -- more outsourcing is certainly helping. That's an industry trend. And finally, I wouldn't underestimate when you look at fees, it's just this importance of disciplined pricing and thinking about how do you onboard clients faster, how do you ensure that you're charging for nonstandard things. Those are also things that can be a meaningful uplift if you get it right and you're focused.

So you mentioned momentum in alts and ETFs. Could you just sort of explain what -- to what should we attribute that success or increasing momentum? And are there pockets that you're particularly excited about in terms of growth?

Yes. So ETFs, definitely, I would say we were very deliberate and have been very focused on building out a really best-in-class ETF servicing platform. We're working with some of the largest asset managers in the world also to continue to redefine what that ecosystem works -- looks like and how -- what role they play in that. . And that is very much we're seeing drive growth in ETFs, both AUC/A and ultimately revenues. I think AUC/A and ETFs is up about 20%, if I'm not mistaken, year-on-year. Number of funds serviced is up about 10%. So we're seeing healthy performance there. Alts, another area of growth we have invested over the last several years. We did do a few lift-outs as well to [ seed ] like real estate, and ultimately, the credit space. This is many, many years ago. And both AUC/A and revenues for alternatives are also up, and that's actually despite an industry slowdown in some -- in fund launches. And as I mentioned earlier, the 2 areas there, really, credit and private equity, are areas that we're kind of really doubling down, especially given the market backdrop. And other growth areas, and we've touched upon already data and the continued evolution of our Vault product and ability to give our clients the ability to actually, again, combine their data with third-party data and allow us also to provide more analytics or for them to develop their own analytics off that data. Digital assets is an interesting area, not so much around like the revenue potential in the short term, if you will, but we do believe that tokenization and how you think about an asset, whether it is a traditional security or currency or maybe alternatives broken down into much smaller slices for retail investors. At some point, we all will have to -- we have to have the ecosystem. We are the first -- we were the first bank to support an internal house digital asset custody solution. Distribution, again, very big area of investment across the firm and one that is continuing to grow. We are extraordinarily uniquely positioned there, especially in the retail space in the U.S. with Pershing. And on top of that, by the way, we have a business we call Growth Dynamics, which provides analytics around distribution and what products -- because of the unique perch where we sit, what products actually are selling in literally what ZIP codes. Very, very powerful information. And finally, look, we're leveraging ONE BNY Mellon, which is something Robin has talked extensively about. It's, what I call, mining the seams across the company. We actually track referrals from one business line to another, and that actually materializes into real revenues.

So the growth dynamics is product, is data that comes out of Pershing that you sort of give to your Asset Servicing clients' information. And that's something that you charge for and...

Yes. And it's not so much Pershing, it's actually sub-accounting and other parts of the firm where we have, again, a very unique vantage point on supporting what clients and what flows are going from one product to another and what geography.

Yes, that's really useful. So you've hit on pricing in a couple of your other comments. Traditionally, this has been a pinch point for the industry. It's relatively mature, so it makes sense that our clients are price sensitive, and yet it seems to have inflected a little bit. You're nodding, so I'm not off base. Why do you think this is? And is it persistent? I guess, that's to be determined, but...

Yes. I mean pricing pressure in a competitive business like ours is the norm. So -- and we are not seeing anything really out of the ordinary. And what I would say about repricing conversations, actually they're not acrimonious, especially if you have the data. And look, clients want us to be profitable. They want us to be able to pay our people, invest in our products so that we can service them and keep up. So I mean, it's not an us against them. And they also, by the way, are asking increasingly, even some of the largest asset managers, to be tell me when I'm not standard. I want to know when I'm not standard. Help me understand where I can be more standard. It derisks their operating model. And like I said, though, the data is really, really important. And we have gotten really, really good at understanding for our clients, you look at their trade flows over, call it, the last month and understanding what's going straight through versus the 2% that's actually flowing outside the straight through that then people have to pick up and actually work with. And we can share that with our clients and say that 2%, by the way, is causing this amount of work. And these are the kind of things we can do so that, that 2% can move into state -- going straight, STP. We are very good at looking and ranking our clients around a number of inquiries, reconciliation breaks, those sorts of things as well. And I mean we share that with our clients. That's powerful. So what I would actually say is sometimes -- not sometimes, more often than not, when you're armed with the data, the repricing conversation is very powerful and actually builds stronger relationships because you're helping them.

So that sounds really powerful and arms you for the conversation. If you were to go back a few years ago when you were in the business, did you have that data? Like is this part of the...

Not nearly as granular. Oh gosh, no. This has been a big area of investment as well. It was not nearly as granular as we have today, yes.

Got it. So then another part of the value proposition from your perspective is the deposits that come in and so forth. Can you talk a little bit about how important those are to the economics? And we've gone through this crazy period with rates. Have you been surprised with the way deposits have been moving and repricing and so forth? Does it fit into your thinking? And how do those conversations fit into what we were just talking about, the total relationship with the client?

Sure, sure. So these are just Asset -- when I think about Asset Servicing specifically, I mean the first thing -- I'd just point out a couple of things about our deposits. They're largely operational. So they are what I would call kind of activity-based deposits, kind of tied to or based on fee revenue. So that's very valuable for us as a firm. Also in Asset Servicing, we have a very healthy mix of international deposits. So about 1/3 of our total is non-U.S. dollar. And of course, betas there are lagging what you're seeing in the U.S., so that's helpful. Also, look, we service large institutional, very smart clients. So naturally, betas in Asset Servicing will be a little bit higher than they might be in other parts of the firm, but that's expected. We planned for it. We know that. And similarly, when you think of NIBs just in -- for Asset Servicing versus a couple of other areas like I think, Corporate Trust, which has escrow accounts, our NIBs would naturally -- or other businesses would naturally have higher structural NIBs than Asset Servicing when you think about it across the firm. But look, bottom line, balances beta is behaving very much as expected. And the one thing I'd say there is that really -- that's not a passive outcome. I mean that is because we have been proactively managing deposits through this cycle. I can tell you from sitting in the CFO seat, we have an incredible group of individuals who -- a CIO, a treasurer who do this. And as I think Robin's talked about, we brought together deposit management and liquidity across the firm. So we're very -- it's very powerful. And pricing and our product offerings, et cetera, we look at across the firm so there's so much more discipline than before. And that feedback loop as rates are changing is very healthy.

One of the great things about having the former CFO in charge of the business is you have a keen eye to margins and expenses and so forth. So could you maybe just share with us some of your thoughts on opportunities to improve the margins in the business or some of the things that you're looking at I think that you have an expressed goal for the segment overall of a gain of 30%. You're not that far from it, but realistic time frame riff on expenses?

Yes. So you can imagine coming back into the seat in Asset Servicing. And of course, I sat on a podium with -- certainly with Robin, where we talked about Securities Services taking the margin from something at the time, which was about 20% to 30%. We've made a lot of progress, as you can all see from our results. And one of the things I did when I came back into seat, of course, is really dig in on a very granular basis and ultimately re-underwrite our ability for Asset Servicing to do its part, right, because remember, Securities Services is a larger segment. And I do, I feel very confident that we can get there. We always said part of it would be top line. So part of it would be certainly like NIR recovery. You've obviously seen a lot about or most of that probably already. We're doubling down on fee growth. I've talked about a lot of those trends that we are already seeing, and you're seeing that come through in the numbers. And then when it comes really to the expense line, I think about it in 2 categories. You've got the lower hanging fruit, which we've been at now and you're seeing it in the bending of the cost curve. And that goes back to comments I made around consolidating vendors, retiring -- or consolidating also like our sub-custodial network, eliminating manual processes, digitizing and automating how we work with clients, some of the spans and layers stuff, just frankly, at some things just stop doing things. Like we don't accept broker -- paper statements from brokers anymore for trade instruction -- like for trade information. So that's the lower hanging fruit. There's a more difficult stuff. It's retiring legacy platforms can be more difficult. You're also dependent upon client constraints. But we are actively doing that. That's simplifying our operating environment, works to collapsing security masters, client hierarchies, product hierarchies, all of that creates efficiency with data so you get one golden source of data. I think I talked a little bit about, too, of working more across the firm. So doing it once, ceding control and doing it once and doing it best. And look, I do think new technologies, whether it's digital ledger technologies that can transform, and we're working on things in the TA space, for example. And by the way, AI, I mean, I really do think this is a step function in terms of what it can help us do in terms of our expenses. And I mean I'm already looking at we're leveraging AI already for first drafts of RFPs. We're thinking about it for NAV construction. So I think that is very promising as well.

That's interesting. So we only have a minute left. I'm sorry to the audience. I took up most of the time. But if -- I see Mike is jumping out of his seat there. So Mike, do you have a mic?

So AI is a step function. And you mentioned AI for predictive settlement, for securities lending. And I imagine you would use AI for the data services you provide to clients and for your automation and your liquidity management. We've heard a lot of hype, some other managers say it's hype. And we heard blockchain was going to change some things. We heard the cloud's going to change some things. We heard that digital assets are going to change some things. And today, you come with AI, right? So why is this time different? Or why is AI more of a step change than some of these other digital evolutions or tech evolutions we've seen here?

So this is my perspective. And ultimately, really, because I'm seeing it, like I literally have seen how we've applied AI to certain processes. And literally, things that we started talking about, call it, in May or June, we have now rolled out. And you can sit there and watch how it has changed the basic processes of what we've done: how you can mine data, how -- reporting capabilities. I mean AI can actually listen to meetings, take minutes and do minutes that are needed by Fund Boards, et cetera. They can help -- it helps actually put presentations together.

So we don't have to come here next year.

By the way, we're all out of work. Be happy if you're at the tail end of your career. So no, but I do genuinely because I'm seeing it. And it's not the same kind of lead time for -- that you would need with some of the previous technologies. It's not the same even network effect that you would need for DLT or other things to be powerful. I mean it is incredible. And we were in an operating committee literally yesterday or 2 days ago, I guess, and we had individuals come in and talk to us from -- and just the -- even the stats, the adoption of AI in the last 2 to, call it, 3 months is the equivalent of the adoption of like the iPhone that happened over 12 years. I mean it's just incredible. I mean don't quote me on that, Mike. I mean, you should do your own research. Do your own research, but that was something to that effect.

[ The thousand ] employees that you are hiring, 2% of your headcount, [ suppose you're hiring in ] AI and tech count and that's a lot of 2%, so it's pretty...

Yes. A very big part of it. And by the way, these are new jobs -- like there are new jobs out there as a result of AI. I learned there's a job called a prompt engineer, which is all about how -- a prompt engineer, what are -- an engineer who is...

On time.

No. Well, on time. But no, that is -- it's all about how -- what are the prompts you use when you query AI. And that's a whole new field, data scientists, et cetera. It's incredible.

That's all we have time for. Thank you for your question, and thank you for your insights.