#United States #New York #Broadridge #Automation #asset servicing

Surge in Asset Servicing Volumes

A recent global study conducted by Broadridge Financial Solutions in collaboration with the International Securities Services Association (ISSA) revealed that asset servicing volumes have soared by more than 25% year-over-year. This remarkable growth is experiencing a transformative wave that demands heightened automation and efficiency within the realm of asset servicing.

Challenges Ahead

Despite this surge in volumes, many firms struggle with outdated technology and fragmented systems, which hinder their ability to enhance client experiences effectively. Mike Alexander, President of Broadridge Wealth Management, emphasizes that the financial services sector is currently at a critical juncture. The rapid escalation in transaction volumes coupled with increasing processing complexities creates significant operational challenges and opportunities. Legacy technologies and rising data costs have constrained growth for many firms and players within the sector.

The Role of Technology Providers

Technology providers are pivotal in shifting the landscape of asset servicing, as nearly 60% of all servicing resources are consumed by manual processes related to income and voluntary corporate actions. The report indicates that over 60% of brokers experienced a decrease in automation levels, which directly correlates to rising error rates and operational costs. Additionally, 57% of asset servicing leaders view technology companies as vital to fostering meaningful scaling and automating processes effectively.

Addressing Data Quality Issues

A striking finding of the study reveals that up to 67% of asset servicing errors can be traced back to poor data quality. Firms concerned about mitigating risks and enhancing operational efficiencies are increasingly recognizing that improved data integrity is the linchpin for successful automation initiatives. Outsourcing specific functions, such as tax reporting and event capture, has emerged as an effective strategy to manage complexity and lower error rates. Firms that utilize outsourcing methodologies report significantly reduced costs and improved accuracy.

Client-Centric Investments

As expected, client demands remain the predominant driver of investments in asset servicing, accounting for 38% of the total. Consequently, firms are reallocating resources towards technology investments aimed at ramping up both efficiency and profitability. Given the constraints on budget allocations, stakeholders in the financial services sector are focusing on process re-engineering as a crucial area of change. These progressive investments aim to create streamlined processes that enhance real-time operations, capitalize on tax efficiencies, and maintain the client at the center of the service cycle.

Conclusion

This study clearly illustrates that the asset servicing sector stands at a crossroads, looking for innovative ways to respond to client expectations and navigate digital transformation. With a concerted push towards automation and data quality improvements, the industry can harness the opportunities presented by the surge in service demand. The effective integration of technology coupled with strategic outsourcing and a commitment to elevating client experiences could redefine the future landscape of asset servicing on a global scale.

For further insights and to access the full report, please visit the Broadridge website.