Fintech firm Broadridge, financial research consultancy The ValueExchange, and the International Securities Services Association (ISSA) have jointly published the latest edition of their annual survey on automation in asset servicing. This year’s paper, titled “Broadening asset servicing in 2025”, puts the spotlight on the factors driving transformation within the sector today.
Legacy technology was cited as “the single biggest obstacle to asset servicing automation”. Although asset servicing volumes have grown by more than 25 per cent for almost all respondents in the survey, up to 67 per cent of asset servicing errors are believed to be due to poor data quality.
Almost 60 per cent of total servicing resources are consumed by income and voluntary corporate actions, creating significant operational strain. Issuers want to deliver accuracy and timeliness; despite this, 53 per cent admitted that they are not enabling automation.
Finding solutions
Outsourcing is the favoured solution for managing increasing complexity. Market participants cited it to be especially helpful in tax reporting, event capture, tax reclaims, proxy voting, and class actions. Firms that outsource tend to observe lower error rates and reduced costs compared to those that keep processes in-house.
Tech providers are also seen as critical to managing change. 57 per cent of respondents consider tech companies as “a critical enabler of golden source data” while 77 per cent are in favour of standardising with golden copy data across multiple markets. Golden source data is seen as necessary for consistency, scaling, and building efficiency in event processing.
Although outsourcing and tech investments are seen as the solutions to efficiency challenges, client expectations remain the main driver of investment in asset servicing, getting 38 per cent of the votes. Error reduction came next with 33 per cent, followed by the need to meet regulatory requirements with nine per cent.
Embrace singularity
Mike Alexander, president of Broadridge Wealth Management says, “As firms, traders, and investors demand increased real-time digital automation, and enhanced risk management, we see immense opportunity for firms to reimagine asset servicing through a single platform encompassing the entire asset service life cycle, leveraging AI, common data, and strategic outsourcing. The future of asset servicing depends on the industry’s ability to increase real-time straight through processing, capture tax rules and efficiency upstream, and leverage common data with the client at the centre.”
