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COVID-19 is accelerating the digital transformations of broker-dealers and other financial services firms, who expect to continue accelerating their technology investments as a result of the pandemic, according to the findings of a new Broadridge Financial Solutions study released Tuesday.

Almost all of the C-suite executives from 500 firms surveyed for The Broadridge Next-Gen Technology Pulse Survey said they expected changes to their operating models and next-generation technology strategies as a result of the pandemic, according to Broadridge.

Just 1% of those polled said they didn’t expect to make any changes, Broadridge said. However, only 10% of those surveyed said they expected a high degree of change requiring large-scale changes. In comparison, 45% of those surveyed said they expected to make a moderate degree of change, and 44% expected  to make only a few minor changes.

In the next six months, financial services firms plan to focus on increasing cybersecurity and risk management more than any other tech changes, with 63% of those surveyed citing that, according to Broadridge. That was followed by enhancing multi-channel client communications (60%), improving customer engagement and experience (53%) and making significant cost reductions (45%).

Previous investments the firms made that they said were most helpful in managing the pandemic were interactive digital technologies (defined as digitizing customer and employee experiences, workflows and operations), which was cited by 72%, and cloud technologies, cited by 59%, Broadridge said.

Many firms have “reprioritized” their investment strategies due the pandemic and businesses may never return to the old “normal,” and that leaves firms with “little choice but to accelerate their digital transformation,” according to Broadridge.

While 58% of those surveyed said they planned to boost their investments in interactive digital technologies, 54% said they planned to increase their investments in artificial intelligence and 49% said they expected to improve their ability to quickly gather and analyze data moving forward, Broadridge said.

The pandemic also changed the role of fintech service providers, with 70% of respondents stating that fintech providers’ ability to offer innovative uses of next-generation tech was now more important due to the pandemic, Broadridge said.

Almost 50% of respondents agreed that the pandemic increased the need to mutualize, defined as sharing or outsourcing processing functions to reduce costs and increase resiliency, Broadridge said.

BDs and commercial/investment banks agreed most strongly with that, at 49% and 54%, respectively. Meanwhile, sell-side companies (49%) believed that more strongly than buy-side companies (42%), and hedge funds were least likely to agree (36%), Broadridge said.

Technology has provided significant value to financial services firms during the pandemic, according to the survey’s findings. Digital interaction proved the most beneficial of all tech types, with 97% citing it as being beneficial, Broadridge said. That was followed by the cloud (96% calling it beneficial), artificial intelligence and data analytics (86%) and blockchain (44%).

Although AI was initially just used to “streamline operations,” that technology is “now being harnessed to personalize experiences, create products and drive revenue,” Broadridge said in the survey, adding: “Levels of investment and readiness among market participants vary widely. However, most firms recognize the potential for radical change that AI will bring and are investing in solutions.”

On the other hand, financial services firms are “just starting to implement blockchain on a broader scale and many are beginning to profit from these investments,” Broadridge said. “In the longer term, blockchain has the potential to transform the financial services industry as its network of participants and peer-to-peer connections forge better security, transparency and more efficient processes,” it added.

The survey was conducted for Broadridge by ESI ThoughtLab, with polling for the survey completed June 1. The survey was administered to executives from buy-side and sell-side firms, including universal banks (20%), commercial/investment banks (16%), broker-dealers (14%), investment/asset managers (15%), insurance companies (13%), hedge funds (11%) and wealth managers (11%). Responses were split evenly among the North American, Asia Pacific and the Europe, Middle East and Africa (EMEA) regions, Broadridge said.

Broadridge didn’t specify how much RIAs specifically have been adopting technology and how much those firms are expecting to increase their investments in the technology areas cited in the survey. The firm did not immediately respond to a request for comment. However, small advisory firms have tended to lag behind larger firms in implementing new technology due to the costs involved.