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Financial firms are planning on assigning a bigger chunk of their IT budgets towards cutting-edge tech, according to a recent poll by financial services giant Broadridge.

Artificial intelligence, blockchain, the cloud, and digital services are all set to get a larger share of firms’ tech spend. Over the next two years, so-called next-gen technologies will go from 11.8% to 15.7% of financial firms’ IT budgets, on average. 

The 33% bump comes as early adopters of the techniques are not just motivated by cutting costs but the ability to spin up new offerings or lines of business as a result of the tech. The most aggressive users of new tech reported a 4.04% increase in revenue through the use of innovation. That’s compared to only a 1.74% boost in revenue from non-leaders. 

Broadridge polled around 1,000 C-suite executives and their direct reports last fall from a variety of financial firms, including banks, hedge funds, brokerages, insurance firms, and asset managers, to see how they’re investing in emerging technology. 

Emerging tech is benefiting first movers

Much of the tech development at financial institutions has been driven by a top-down recognition that existing business models need to be adapted to keep pace with the changing times. 

Executives are telling themselves, “‘I need more optimization. My business model is changing quickly,'” Chris Perry, Broadridge’s president, told Insider.

“‘I also have exposure losing my clients if I don’t provide a more digital but human experience with my clients.’ So you put that altogether and this is a reinvention of the business model,” he added.

Firms that are leading the charge in tech investments will devote 20% of their IT budget to these new tools by 2023 and are already using tools like AI and blockchain, according to Broadridge.

But reducing expenses as a result of increased efficiency is only part of the …read more

Source:: Business Insider

      

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