Over half of financial services firms worldwide plan to increase their spending over the next two years on next-generation technologies such as AI, blockchain, the Cloud and digital, according to a new study surveying 1,000 global C-suite executives and their direct reports, released today by Broadridge Financial Solutions (NYSE: BR), a global Fintech leader. Broadridge’s Next-Gen Technology Adoption Survey indicated that firms also reported a range of strategic benefits from prior investments in emerging technologies, including accelerated time to market, better decision-making and improved risk management.
Broadridge developed The ABCDs of Innovation Maturity Framework™ for the study to categorize firms as either a Beginner, Implementer, Advancer or Leader in next-gen technology adoption. Next-gen technology maturity was based on progress made in implementing these technologies and reported effectiveness in driving business performance.
Over the next two years, firms worldwide reported plans to increase the share of their overall IT budgets spent on next-gen technologies from 11.8% to 15.7% on average, an increase of 33%.
“In a remote and evolving business environment, investments in AI, blockchain, the Cloud and digital technologies will continue to drive long-term growth and have already become essential to both day-to-day operations and larger strategic shifts around mutualization, resiliency and digital transformation,” said Chris Perry, President of Broadridge. “Broadridge’s inaugural study reveals that for financial services firms, investments in next-generation technologies directly lead to a range of strategic benefits, in addition to increased revenues and profits and decreased costs. Put simply, those who are investing in technology with a clear strategy for accelerating adoption are getting the most value.”
The study found Leaders, those firms with multiple next-gen technology use cases, which are moving toward enterprise-wide adoption and driving major performance gains and business transformation, are spending a greater share of their overall IT budget on emerging technologies versus Non-leaders. They also report improved employee productivity, more effective risk management and compliance, faster creation of new/enhanced products and stronger reputations as a result of their investments.
The study reveals that while spend is increasing across the board, firms that are Leaders in next-gen technology adoption plan to increase this allocation to nearly 20% of their overall IT spend by 2023. The study showed that sell-side firms are spending a greater proportion of their IT budgets on next-gen technologies than buy-side firms and will continue to do so over the next two years.