Here's what comes next

Next-gen tech delivers value for buy-side firms that ramp up investment

Senior Partner, UK Investment/Asset Manager

Leaders say

Asset class expansion and the convergence between public and private markets mean firms need to manage portfolios and data across multiple, complex asset classes

Competitive dynamics, cost pressures increase the pace of transformation

“Very large players will get larger, and then you'll have smaller boutique firms that are high touch and offer niche services. Everyone in the middle is going to get squeezed.”

Passive investing and regulatory compliance are continuing to create fee and cost pressures

Scale and cost are driving consolidation, so many firms need to reinvent themselves

The C-suite sees a digital future

More than half of study participants agreed that digital transformation is currently the most important strategic initiative for their company. Firms now spend around 27% of their overall IT budget on it, compared to only 11% last year.

Digital transformation is now mainstream

CIO, US Private Equity Firm

“We plan to invest more in blockchain technologies, as it will substantially reduce transaction costs and ensure transparency.”

Chief Digital Officer, Danish Hedge Fund

“Data analysis and visualization tools are the most essential project in a firm like ours since they reduce the time spent on data preparation and streamline financial reporting.”

Chief Digital Officer, Chinese Asset Manager

“In the next five years, using open platforms will enable us to drastically cut both the overall cost and time required to create and access new apps and programs.”

There is optimism that buy-side firms will modernize their tech stack before we land a human on Mars, currently estimated to happen within a decade. AI is also starting to deliver value, with 74% saying it is now significantly changing the way they work.

Next-gen technologies are driving value

of respondents say it is now their most important strategic initiative

of IT budgets now allocated to digital transformation – up from 11% last year

say AI is now significantly changing the way they work

think the industry will modernize its tech stack before we land a human on Mars

Quantum computing

Firms classed as Leaders in our maturity framework are increasing spend and prioritizing Cybersecurity and Data Analysis/Visualization for investment.

Buy-side Leaders increase investment

Gaining a unified view of data across asset classes

Data Analytics and AI: mission critical for the buy-side

Eliminate legacy systems and shift to a modern, cloud-based platform

of firms classed as Leaders are at an advanced stage of implementing integrated data platforms

of firms are planning to increase investment in data analysis and visualization tools in the next 2 years

If executives had a magic wand to accelerate transformation, they said they would:

Buy-side firms are placing a strong focus on data and analytics solutions to manage portfolios across asset classes more effectively, become faster at product development, enhance distribution and get more flexible at delivery. AI tools are also creating tangible benefits.

Leaders are increasing investment across technologies

percentage point increase in investment planned over next 2 years

Blockchain

AI

Data analysis/ visualization

Cybersecurity

10%

18%

21%

24%

27%

More than 70 firms on the buy-side are participating in LTX, a machine learning driven e-trading platform and benefit from increased trading opportunities in the US corporate bond market. The platform uses data science and AI to facilitate increased liquidity, best execution, and price improvement.

Unique data sources can provide insights into distribution channels, customer needs, and ongoing trends such as ESG investing. This helps asset managers make smarter decisions about launching new products across regions and asset classes, optimizing distribution channels and streamlining the sales process.

Firms on the buy-side are using advanced data and analytics tools to manage asset class expansion and the convergence between public and private markets. With portfolios spanning multiple public and private investment vehicles, they can now centralize, manage and visualize data to monitor and analyze portfolio construction, performance and risk in one place.

AI-Driven Platform Enables Smarter Trading

Using Data to Drive Strategic Decision Making

Data and Analytics Tools Simplify Portfolio Convergence

of respondents agreed that Blockchain/DLT will become the core of financial markets infrastructure within the next 10 years. While there are challenges to overcome, a number of live blockchain platforms are already providing value.

Distributed Ledger Technology: ready for prime time

Simplified operations, reduced costs

Firms on the buy-side and sell-side can enhance the repo trade lifecycle through a blockchain-based Distributed Ledger Repo Platform; a single platform where market participants can agree, execute and settle repo transactions. The platform offers immediate cost savings and a reduction in operational risk through fast and frictionless settlement, optimal collateral use and real time transparency.

DLT Simplifies Operations and Reduces Costs

Market participants - fund managers, investors and asset servicers - can collaborate, agree and execute transactions in real-time throughout the fund lifecycle using blockchain-based Private Market Hub. The platform offers a secure, cost-effective, efficient and frictionless digital alternative to the fragmented, complex, often manual and time-consuming processing which characterizes the industry today.

Blockchain Streamlines the Private Equity Lifecycle

60 %

What are the practical steps buy-side Digital Leaders take to accelerate transformation?

Broadridge partners with clients across Asset Management, Wealth, and Capital Markets to accelerate digital transformation. We modernize platforms, digitalize communications, and offer next-gen technology and data solutions that help our clients capitalize on emerging opportunities.

Broadridge prepares you for what’s next

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20%

36%

Building in house skills and resources needed to succeed

29%

42%

More likely to create a culture of continuous innovation

15%

25%

Increasing spending on next-gen tech in next two years

13%

70%

Replacing legacy systems with cloud-based IT platforms

10%

52%

Have advanced integrated data platforms across business departments

30%

At advanced stage of applying AI, blockchain, cloud, and other emerging technologies

Leaders

Non-Leaders

What leaders do differently

This report provides practical guidance on how executives are investing and what firms classed as Digital Leaders do differently to accelerate transformation.

We interviewed C-suite executives and direct reports in business and technology roles from 165 buy-side firms across North America, EMEA, and APAC to understand the progress they've made with digital transformation, the challenges they face—and their plans for the future.

We categorized firms as Leaders or Non-leaders based on how advanced they are in the most essential aspects of digital transformation. This includes their innovation culture, use of emerging technologies, modern IT infrastructure, seamless customer experience (CX), internal skill-building, and adoption of security and privacy protocols.

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Be able to anticipate customer needs 5 years from now

Gather, integrate, and provide access to all enterprise data

Real-world applications

What defines a Leader

Hedge fund managers

Private equity and debt managers

Asset managers