How Data is Reshaping Financial Services in 2022 and Beyond

Financial services firms must keep up with the rapid evolution of technology and the ways in which data is used to make trading decisions and better understand markets. In the race for innovation and integration, those at the front of the pack are quickly gaining an advantage over their rivals.

Broadridge North America Wealth and Capital Markets Solutions President Michael Alexander are interviewed in this piece about how technology trends are reshaping financial services businesses.

Do you think there will be any new technological developments in the financial services industry by 2022? What is the future of the industry?

According to our assessment of the current state of the industry, most companies are looking for ways to streamline their complex infrastructure, which has grown in a dispersed manner across geographies and asset classes. In order to create solution suites that push industry participants toward a one-stop-shop model for fintech services, the larger industry players are actively seeking M&A activity. SaaS-delivered solutions can be combined into a single browser-based solution. These are aimed at creating the best-of-breed combination.

When it comes to using technology in the securities industry, how do you view the regulatory environment?

The use of technology to increase regulatory oversight and compliance is on the rise. Firms now have the ability to identify difficult-to-diagnose issues and concentrate their efforts on those that require attention thanks to new technology. Because industry participants realise it’s best to share the investment and cost of compliance with a trusted third-party partner, compliance is becoming non-differentiating. Regulated compliance technology and operations are increasingly being offered via the SaaS model.

In what ways are broker-dealers’ business models being altered by machine learning and robotics?

Automation and machine learning are being used to increase production capacity, improve quality and increase risk management. Because of the emergence of this new technology, companies now have access to tools and methodologies that can help them assess the potential benefits of their ideas and then prioritise them in order to maximise return on investment. Human and digital labour in a managed environment is likely to combine in a way where the robots automate repetitive tasks and gradually increase their capabilities while being actively supervised by their human handlers, who have ultimate authority over the robots.

Is it possible for companies to implement new technologies in a cost-effective manner while still remaining current?

Broadridge is focused on the “ABCD’s” of innovation: artificial intelligence (AI), blockchain, cloud, and digital. Investing in AI and machine learning technologies requires careful management and curation by companies. As a result, they must keep the rapid spread of automation elements from becoming an uncontrollable infestation.

The right technology, well-trained cross-functional employees, and large volumes of optimal data sets are required for this type of innovation. Such investments should be pooled and leveraged by large industry utility players, who have access to a wide range of data sets from their clients. As a result of Broadridge’s extensive client base, we are able to invest in cutting-edge technology while spreading the costs among our customers. This allows our clients to reap the benefits of our ability to invest once and reap the benefits for many.

Do you have a set of best practises for technology development?

In order to provide our customers with a single code base that can be easily customised, we are constantly looking for new ways to improve our service and product offerings. Better estimation techniques, agile development methodologies, development operations, automated regression testing, and iterative proof of concepts with multiple clients allow us to test across a broader subset of client data. Broadridge components for the front, middle, and back-office technology are used to create an open technology ecosystem that allows customers to extend and integrate their technology infrastructure.

Mr. Alexander is the president of Broadridge North America Wealth and Capital Markets Solutions, where he oversees the company’s managed services and technology for trading, business process management, wealth desktops as well as reporting solutions for the financial services industry. Mike was previously the senior vice president of operations at Charles Schwab before joining Broadridge. When he was at Pershing, Smith Barney, and Shearson Lehman Brothers, Mike held senior positions in operations management. SIFMA’s Operations and Technology Steering Committee and FINRA’s Operations Advisory Committee both count Mike among their ranks. While on the SIFMA Private Client Operation Committee, SIFMA Operations Committee, SIA DMD Executive Board, SIFMA Operations Advisory Committee, and SIA DMD Executive Board in the past, he was named Chairman of the SIA Operations Committee in 2006.

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