Broadridge: Fintech’s Journey to Digital Transformation

Like most sectors across the world, financial technology is ramping up investments in AI and digital assets while grappling with data harmonisation challenges and legacy technology constraints.

According to a recent study from Broadridge Financial Solutions: The fifth annual Digital Transformation & Next-Gen Technology Study, 80% of firms are making moderate-to-large investments in AI this year.

Additionally, half of executives anticipate significant adoption of digital assets and distributed ledger technology in capital markets over the next several years.

The study surveyed more than 500 financial services technology and operations leaders worldwide, representing wealth management, capital markets and asset management firms – examining what guides each organisation's transformation strategy and explores approaches to data management, AI, cryptocurrency, cybersecurity and personalisation.

Yet despite this forward momentum, the research identifies persistent obstacles.

Key challenges from Broadridge’s study

While 58% of financial services technology and operations executives agree that a clear data strategy leads to maximum returns on technology investments, 40% acknowledge ongoing data quality issues within their organisations.

This means that the pace of technological transformation remains a concern for many decision-makers, as almost half (41%) of executives feel their technology strategy is not advancing quickly enough and 46% believe legacy technology is undermining their operational resilience.

Financial institutions are responding to these challenges by increasing technology innovation budgets.

The study finds that firms expect to allocate 29% of their total IT spend to technology innovation over the next two years, an increase of 7% from the previous year's research.

How data strategy is critical for AI implementation

Broadridge’s research comes as new AI models are triggering market volatility in the fintech sector – with Bitcoin ETFs generating billions in daily trading volume and cybersecurity becoming a global priority.

“As financial services firms modernise their operations and move away from legacy systems, many are realising that the right data management strategy has the power to break down silos and achieve the level of data quality needed to realise the potential of AI and sustain prolonged digital transformation within their organisations,” says Chris Perry, President of Broadridge.

Meanwhile, data harmonisation – the process of bringing together data from different sources into a cohesive structure – has emerged as a key focus.

Broadridge reports that 58% of executives identify it as the ideal driver for maximising return on investment and 60% express confidence that their data quality will not create transformation challenges.

Gen AI and Broadridge’s digital assets gaining traction

The study, unsurprisingly, further shows changing attitudes toward Gen AI:

• 72% of firms are making moderate to large investments in Gen AI this year, up from 40% in 2024
• More than two-thirds (68%) believe that Gen AI will primarily impact employee productivity
• 35% expect to start seeing returns on investment within six months

Digital assets – which include cryptocurrencies, tokens and blockchain-based financial instruments – have also captured significant attention from executives.

Broadridge finds nearly three-quarters (71%) of firms are making major investments in blockchain and distributed ledger technologies this year, compared to 59% in 2024.

Investment in cryptocurrency has increased as well, with 64% of firms making substantial investments, up from 51% in 2024.

Furthermore, almost half (47%) believe distributed ledger technology is creating new opportunities in capital markets, though 73% anticipate greater regulation and governance for digital assets.

Cloud platforms forming the backbone of financial services transformation

Another crucial area of technology transformation is cloud computing – which remains central to technology strategies across the financial sector.

Broadridge finds that 86% of firms are integrating cloud into their processes, with 84% making moderate-to-large investments this year.

When asked which technology has the greatest impact on their business, 31% of executives selected cloud platforms and applications.

Additionally, 27% plan to increase their investment in cloud technology over the next two years.

This means that the shift toward integrated solutions rather than piecemeal approaches is becoming more pronounced across the industry.

“It's really all about straight-through processes and the ability to see consistent data across all products and workflows,” says Jason Birmingham, Broadridge Global Head of Engineering.

“Firms that are still trying to drive transformation by bolting on point solutions are quickly starting to realise that there is a limit to how much they can accomplish before they address the fundamental flaws in their platforms.”

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