Except the alpha, providers are asked to do ‘the other stuff’

INTERVIEW. At work, investment operations professionals meet a “spaghetti” of fee compression, plentiful regulation, and obsolete but business-critical systems. 

PostTrade 360° speaks with Samir Pandiri, president of Broadridge International, about the drivers in a securities-operations landscape where tech providers, old and new, are asked to perform an increasing part of the processing, and to add new capabilities. 

“Clients want to manage their alpha and the client experience. Then they say ‘you can do all the other stuff’,” says Samir Pandiri (with alpha referring to the asset managers’ portfolio tweaks to beat their benchmark indices). 

As a 60-year-old financial-technology business, with 14,000 employed associates, Broadridge Financial Solutions is at the intersection of large-scale traditional finance on one hand, and the emerging fintech trend on the other. The name Broadridge is in use since 2007, when the business was spun off from its previous group, ADP. Since then, the company has been on an acquisition campaign, to satisfy the ever-broader taste for capabilities and geographic coverage that the world’s financial institutions express. 

Its largest deal to date was the 2,5-billion-dollar purchase in 2021 of Sweden-based Itiviti. When Samir Pandiri speaks with PostTrade 360°, he is on a visit to its Stockholm office, as part of his responsibility for the Broadridge group’s activities outside its North American home turf. 

Historically, Broadridge has been a large player in the middle office and the back office. In contrast, Samir Pandiri explains, Itiviti is “all about the front office trading and connectivity solutions”. Thus, its integration into Broadridge means the group has the full front-to-back workflow covered.  

Too much friction

Before Samir Pandiri joined Broadridge in 2019, he had only a year earlier left an extremely senior position on the services side of the industry – ending a six-year period as CEO of the global asset servicing division at world-leading global custodian BNY Mellon, his employer since 2005. Comparing service and technology provision, he emphasises the similarities: Both businesses are about supporting the same clients for the same business purpose. Samir Pandiri’s university degree was in engineering and his move into finance somewhat coincidental in the first place, yet he sees a connection: 

“As a chemical engineer by training, I’m always looking to make the process better and if you look at this whole capital-markets, securities-services arena, there is a lot of friction in the system. So anything that I could do to make it more efficient, to make the investment process easier, is something that I strive to do. And I’ve spent my whole career doing that, at the Bank of New York, Broadridge, and other places.”

“A noble purpose”

Personally, he carries a strong engagement for people’s possibilities to have “better financial outcomes”, his own background playing a part. 

“I’m passionate about this, because I genuinely believe that what we are doing – which is helping people save money and have better financial outcomes – is a very, very important thing. I moved to the US when I was very young. My parents were immigrants from India with the proverbial 100 dollars in your back pocket. So, you know, having good financial outcomes was quite important, getting a good education, working hard saving money to buy a house … So, I think this is a noble purpose of the sort all of us want to have.”

So how should market participants navigate this demanding need for lowering costs and growing their capabilities? Samir Pandiri does not offer a general answer. The number of possible configurations of new and old elements in their existing stacks is infinite. Identifying solutions starts from three assessments: the first relates to technologies, costs, and strategy, the second to risk, and the third to the aspired business outcome. 

Enter the app store

One trend is that large incumbent providers, whether asset-servicing firms or system providers, try to become the platforms of choice both for their own services and for offers from third-party application providers. 

“15 years ago, a company’s website would show only the applications that company provided, so a custodian would have a custody website, and a payments company would have a payments website. But think about an iPhone today,” says Samir Pandiri.

“What we want to do is provide a platform or a marketplace where users can consume the products that we manufacture but also make it available for third-party apps or other things they use that are important. That makes it a lot easier to integrate into your daily workflows,” says Samir Pandiri. 

Today’s flexibility enables a lot of innovation. 

“Instead of developing everything yourself you can now integrate services from small fintechs, data providers, and large custodians … there’s a whole bunch of different providers, all on this platform. And that generates a lot of value and time efficiency for the customers.”

In principle, it could go both ways – with Broadridge sometimes hosting the platform for other providers’ apps, and sometimes offering its own services through other actors’ platforms. Overall, however, it is as the full-offer provider that Broadridge sees its main role. 

“Yes, given our scale, and the front-to-middle-to-back solution, we are definitely the platform provider.”