Surging Asset Servicing Volumes Highlight Automation Demand
The Shift in Asset Servicing Volumes and Its Implications
Recent studies reveal a remarkable increase in asset servicing volumes, with growth exceeding 25% across nearly all market participants. This surge signifies not only a burgeoning marketplace but also a pivotal moment for firms looking to enhance client experiences and mitigate risks. Legacy technologies and disparate systems present significant barriers, underscoring the need for modern solutions.
Challenges in the Current Landscape
The findings underscore a startling reality: while asset servicing volumes rise, many firms find themselves ensnared by outdated processes. A staggering 67% of errors within asset servicing can be traced back to poor data quality, a direct consequence of using legacy technologies. These factors serve as a reminder of the pressing need for transformation in the industry.
Importance of Outsourcing
Outsourcing has emerged as a viable strategy for firms to manage rising complexities, especially concerning tasks like tax reporting and proxy voting. Firms that embrace outsourcing often report lower error rates and cost efficiencies compared to those that strive to handle operations entirely in-house. This shift reflects a broader trend towards strategic resource management in asset servicing.
Role of Technology Providers
An alarming trend indicates that nearly 60% of servicing resources are devoted to income and voluntary corporate actions. As brokers note a decline in automation, higher error rates become inevitable, contributing to increased operational costs. The study reveals that over half of asset servicing leaders view technology companies as crucial facilitators for achieving golden source data, which plays an essential role in the delicate dance of automation and scalability in asset servicing.
Investment Driven by Client Demands
With client expectations acting as the primary motivator for investment—cited by 38% of firms—asset servicing providers are prioritizing enhancements to technology. The drive to minimize errors follows closely behind, accounting for 33% of investment motivations. While some anticipate a reduction in servicing costs, the majority are channeling funds towards technological advancements that promise efficiency and profitability.
Future Directions in Asset Servicing
As companies focus on increasing profitability within asset servicing, there is a clear pivot towards technology investments. Process re-engineering has emerged as a key area of change, identified as a significant driver of automation in recent years. This shift showcases a commitment to modernizing operations and improving service delivery.
Methodology of the Study
The insights presented are drawn from a comprehensive survey conducted by The ValueExchange, encompassing over 270 responses from various market participants. This annual benchmarking study aims to capture trends and best practices in asset servicing through structured questionnaires, ensuring reliability and depth in its findings.
About Broadridge Financial Solutions
Broadridge Financial Solutions (NYSE: BR) stands out as a leader in technology solutions within the financial sector. The company is dedicated to aiding clients in operating and growing their business efficiently. With an impressive operational capacity that processes over 7 billion communications yearly and a trading volume that exceeds $15 trillion daily, Broadridge proves indispensable to its clientele. Recognized as a top place to work, Broadridge employs a dedicated workforce across multiple countries, fostering a culture of innovation.
Frequently Asked Questions
What is driving the surge in asset servicing volumes?
The surge is primarily driven by an increase in transaction volumes, coupled with heightened processing complexities in the market.
What challenges do firms face in asset servicing?
Many companies grapple with outdated technologies and poor data quality, resulting in increased errors and operational challenges.
How is outsourcing beneficial in asset servicing?
Outsourcing enables firms to manage complexities more effectively, leading to lower error rates and reduced operational costs.
Why are technology companies critical to asset servicing?
Technology companies provide essential support in achieving accurate and efficient data processing, which is vital for enabling automation.
What are the primary motivations for investment in technology?
Client expectations and the need to reduce errors are significant motivators driving investment in technology solutions within asset servicing.
About The Author
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