Data management and AI automation tools are the top investment for financial firms
- Financial services firms have particularly increased investment in technology that can better optimize data and modernize data management
- 98% of respondents’ companies are investing in their front-to-back-office workflow management
- firms are also investing in AI and automation (23%), more human capital (13%), cloud-native capabilities (10%) for uniformity
Financial services firms today rely heavily on technology to remain relevant and competitive in the industry. With consumer and business demands evolving since the COVID-19 pandemic, financial services firms have also upgraded themselves. In the Asia Pacific region, financial services firms remain highly competitive and continue to invest heavily in new technologies.
According to new research by Broadridge Financial Solutions, financial services firms have particularly increased investment in technology that can better optimize data and modernize data management. The research was compiled from a survey of 200 financial services professionals, conducted at the recent SIFMA Operations Conference in May 2022.
With data growing at much faster speeds today, optimizing data that comes in has to be a prerogative for financial services firms. At the same time, the increased growth in data also means that the industry needs to have the right tools in place in managing its data. More often than not, most financial firms end up having to deal with mountains of data and may find themselves lacking sufficient data management capabilities.
The survey also showed that as many as 98% of respondents’ companies are investing in their front-to-back-office workflow management. Also, more than one-quarter (27%) of respondents cite data management tools as their firm’s priority investment. In addition to data management, firms are also investing in AI and automation (23%), more human capital (13%), cloud-native capabilities (10%) for uniformity, and blockchain technologies (8%) to improve overall efficiencies.
For Vijay Mayadas, President of Capital Markets at Broadridge, in today’s rapidly evolving world, an optimized workflow is crucial and good clean data is key. And yet, Mayadas comments that firms are drowning in the complexity of managing and simplifying data without the technology and digital infrastructures in place to support its management, stifling transparency, agility, and growth.
Unlocking the value of data for financial services
Financial services firms are aware that optimizing and contextualizing data can lead to better data management and streamline internal workflows. However, 94% of such firms are facing challenges around effective data use. This is mostly due to hurdles in the organization which include legacy or outdated technology followed by poor data quality.
After a year of job-hopping and “The Great Resignation,” it comes as no surprise that firms are also having a hard time finding the human capital to effectively leverage data. Nearly one-fifth (19%) say they’re experiencing an inability to quickly test, onboard, validate or maintain datasets.
Moreover, the research found that more than half of the attendees (57%) confirmed their firms still have progress to make before they reach the advanced stages of their innovation and technology efforts. This can be deeply worrying for financial firms, given the speed in fintech development that other companies are already leveraging.
“We hear from clients and the survey findings highlight how firms are overwhelmed with the amount of data and limited in how to use it. By assessing ones tech stack and partnering with trusted providers, firms have the opportunity to maximize the capability of their data and improve their workflow management,” added Mayadas.
The survey of 200 financial services professionals was conducted at the 49th Annual SIFMA Operations Conference & Exhibition in Phoenix, Arizona in May 2022.
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