Digital Transformation enters a new phase —here’s what comes next.
Digital transformation is still at the top of the C-suite agenda, but it’s entering a new phase driven by more powerful technology. The third-annual Broadridge Digital Transformation and Next-Gen Technology Study explores the investment decisions and practical realities financial services firms face during their transformation. This year we surveyed 500 C-level executives and direct reports across the buy side and sell side from 18 countries to understand where they stand today, and what they expect in 2023 and beyond.
From intriguing to essential?
More than half of 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.
For many, digitalization is becoming an integral part of their change management and business innovation programs. These once-novel projects are now “business as usual.” Seventy-one percent say AI has significantly changed how they work. More change is coming as AI’s capabilities expand. Established financial firms face challenges from new “digitally native”*entrants to the market, particularly on the distribution side of financial services. These upstarts aren’t weighed down by legacy systems nor outdated thinking. They’re agile and tech-obsessed: To compete, incumbents must be too.
Reinvention for a digital world won’t come easy
Reinvention for a digital world won’t come easy, especially for incumbents with established systems and procedures. More than 40% of respondents say they’re still held back by inflexible legacy systems. More than a third of firms lack funds for digital transformation – and economic headwinds aren’t helping. The same percentage struggle to balance innovation with day-to-day tasks. This is driven in part by a shortage of the talent and skills needed to advance.