Broadridge Financial Solutions Drives Innovation in Asset Servicing Amid Industry Challenges

Broadridge Champions Innovation in Asset Servicing Amidst Industry Challenges

Broadridge Financial Solutions Inc. has recently launched a pivotal study titled "Broadening Asset Servicing 2025," in collaboration with the International Securities Services Association (ISSA) and The ValueExchange. This comprehensive research draws insights from over 270 industry leaders and highlights a significant trend: asset servicing volumes are surging by over 25% year-over-year. This growth is largely driven by the increasing complexity of transactions and a rising demand for real-time digital automation. However, this substantial increase in volume also brings to light the pressing challenges that industry leaders face, primarily stemming from outdated technology and subpar data quality.

A major finding of the study reveals that a staggering 67% of servicing errors can be traced back to data issues. Mike Alexander, President of Broadridge Wealth Management, underscores the urgency for innovation through the development of a unified platform that not only enhances risk management but also leverages artificial intelligence and standardized data practices. He points out that, over the past five years, process re-engineering has emerged as the most effective catalyst for automation. This innovation is crucial as firms grapple with the complexities of modern financial markets, where the demand for accuracy and efficiency is paramount.

Furthermore, the study indicates that outsourcing has become an increasingly vital strategy for firms seeking to navigate the rising complexities of asset servicing. Areas such as tax reporting and proxy voting have shown notable improvements in efficiency when outsourced, as these firms report lower error rates and reduced costs. Despite this, the research also reveals that nearly 60% of servicing resources are consumed by income and voluntary corporate actions, placing additional operational strain on firms. Alarmingly, over 60% of brokers have reported a decrease in automation levels, resulting in higher error rates and costs. The findings illustrate that 57% of asset servicing leaders recognize technology providers as crucial partners for achieving meaningful scale and automation within the industry.

In light of these findings, the future of asset servicing is poised to hinge on addressing the challenges presented by legacy systems and inadequate data quality. Embracing innovative technologies, alongside strategic outsourcing, will be essential for enhancing efficiency and accuracy in the sector. The insights from Broadridge's study serve as a clarion call for industry leaders to prioritize transformation in their operations, paving the way for a more resilient and efficient asset servicing landscape.

Broadridge’s commitment to innovation and efficiency positions it as a key player in the financial technology landscape, as firms increasingly look to modernize their operations to meet the demands of the evolving market. The collaboration with ISSA and The ValueExchange not only strengthens Broadridge's industry standing but also emphasizes the pressing need for strategic partnerships in overcoming the hurdles faced by asset servicing firms.