Financial Services Firms Ramp Up AI and Digital Asset Investments Amid Data and Legacy Tech Challenges

Financial Services Sector Embraces AI and Digital Assets

Broadridge Financial Solutions' fifth annual Digital Transformation & Next-Gen Technology Study reveals a significant shift in the financial services industry's approach to technology adoption. The study, which surveyed over 500 financial services technology and operations leaders worldwide, highlights a growing focus on AI, digital assets, and data strategy as key drivers of innovation and competitiveness 1

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AI Investments Surge

The financial sector is witnessing a substantial increase in AI investments:

• 80% of firms are making moderate-to-large investments in AI this year 1

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• 72% are specifically investing in Generative AI (GenAI), up from 40% in 2024 1

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• 68% of executives believe GenAI will have the greatest impact on employee productivity 1

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• 35% expect to see returns on investment from GenAI within six months 1

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Digital Assets Gain Mainstream Attention

After years of cautious observation, digital assets are now capturing significant attention:

• 71% of firms are making major investments in blockchain and distributed ledger technologies (DLT) this year, up from 59% in 2024 1

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• 50% of executives believe there will be significant adoption of digital assets and ledger technology in capital markets over the next several years 1

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• 47% believe DLT is enabling new opportunities in the capital markets ecosystem 1

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Data Strategy and Legacy Tech Challenges

While embracing new technologies, firms are grappling with data and legacy system issues:

• 58% of executives agree that a clear data strategy leads to maximum return on technology investments 1

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• 40% admit to having data quality issues 1

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• 41% feel their technology strategy is not progressing fast enough 1

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• 46% believe legacy tech is hurting operational resilience 1

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Cloud Technology Dominates

Cloud technology continues to be the backbone of digital transformation:

• 86% of firms are integrating cloud into their processes 1

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• 84% are making moderate-to-large investments in cloud technology this year 1

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• 31% of executives believe cloud platforms and applications have the greatest impact on their business 1

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Increased Focus on Innovation

Financial firms are allocating more resources to technology innovation:

• Companies expect to dedicate 29% of their total IT spend to technology innovation over the next two years, an increase of seven percentage points from the previous year 1

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Chris Perry, President of Broadridge, emphasized the importance of data management: "With the right data strategy and a clear plan to address legacy tech, firms can drive digital transformation, enable innovation at scale, enhance customer experiences, and foster long-term growth while providing operational resilience and efficiency" 1

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As the financial services industry continues to evolve, the ability to harness new technologies while addressing existing challenges will be crucial for firms looking to maintain a competitive edge in an increasingly digital landscape.