Digital Transformation and Next Gen Survey Results – Digital CxO Podcast EP 80

Hello, and welcome to the digital CXO podcast. I'm Amanda Razani, and I'm excited to be here today with Herman Soto Sanchez, the Chief Strategy Officer of Broadridge. How are you doing?

I'm doing well, Amanda, and thank you for having me. Glad to have you on our show. So first, can you share a little bit of information about Broadridge?

What are the services that are provided? And then, uh, maybe your background please. Sure, no problem.

So, uh, Broadridge is a global FinTech. Now it's a company, uh, that's a member of the SP 500. We're a $25 billion company.

We have about 15,000 associates on a global basis, uh, in charge of what we do. We essentially power investing, governance, and communications. Uh, and what I mean by that is, for example, if you ever bought a share of a company, uh, then Broadridge, you know, played a role in that, right?

From the point of view of the actual trade to to of execute the purchase of that share. We have, we provide infrastructure to capital markets firms, wealth firms, asset managers, uh, to help 'em empower things like trading. Uh, and then once you own the share, uh, if you receive a prospectus, uh, you know, or an annual report or semi end report, our communication solutions provide, you know, those types of communications for you.

Even things like virtual shareholder meetings. And then, you know, if you ever voted, uh, as part of the governance process being a shareholder, uh, a proxy statement for example, we also help facilitate that, right? So we really cover sort of the process of, you know, investing communications and governance know through that cycle.

And that's the critical role that we play just for a little bit of, uh, perspective on that from a STA review. So we process, you know, billions of communications per year. As a result of that, uh, we process around 10 trillion of fixed income and equities traits per day.

Uh, and on top of that, from a wealth perspective, for example, about 30% of wealth advisors in North America leverage our platform and sell capacity. So it's very far reaching, you know, perspective that we have across the global financial markets. Interesting.

Thank you for sharing. So we're gonna talk today about your recent digital transformation and next gen survey, uh, that you conducted. Can you share a little bit about what led to conduct this survey?

What were the reasoning, what was the reasoning behind it? And then we can start talking about some of the results. Yeah, sure.

So, uh, the survey, you know, really helps us get a sense around our customer base and how our customers are thinking about transformation. You know, as I mentioned beforehand, you know, we're very much vested in sort, powering investing communications and governance. And part of the way we do that is we provide, uh, platforms and infrastructure, uh, that our customers leverage.

And these are platforms and infrastructure that go hand in hand, helping our customers sort of digitize, right, to transform themselves, you know, digitally. And so from that perspective, as we thought about sort of what are the trends that are driving our customer's ability to invest and and latch on to digitization, you know, that was part of the nexus of what the survey came from. And so we do the survey annually, and the way we conduct the survey is we do have a wide sample of, uh, companies that participate on a global basis.

You know, typically we look at, you know, close to 500 companies, uh, C level and senior executives across these companies, multiple countries, and try to get a sense of how are they stack up against a set of markers, right? We look at it as 10 different dimensions that we think are very critical for digital transformation. And we ask 'em questions that help us assess where these companies stack up against these 10, you know, different markers of digital transformation leadership.

Great. So let's get started with some of the results. So one of the interesting stats, 75% of firms are confident in their digital transformation journey, yet only about a third have reached the advanced stages of CX modernization and data management.

So what are your thoughts on this and where is the roadblock? Yeah, so, you know, in terms of a lot of companies, um, as we look at that, you know, what we identified is there's a, a difference between companies we classify as leaders and companies that we classify as non-leader, right? And what we've noticed is over time the leaders are pulling away from the non-leader and sort of the stat you just mentioned, for example, when we look at sort of now those areas, those are areas that we consider to be foundational areas, right?

So I mentioned we look at about 10 different dimensions, 10 different markers, and we look at things like data management, automation, sort of core IT that's modern. Now those are foundational elements, especially for digital transformation. And so what we're seeing is sort of companies throughout the leaders are investing heavily in that to establish that foundational which they build upon.

And so that's something that we've noticed sort of on a go forward basis. Obviously the leaders have invested much more than not leaders, and we're seeing that sort of, that gap increase slightly over time as well. Mm-Hmm.

And then our next stat, 70% of leaders indicate that they are prioritizing their AI investments in customer interaction to fuel meaningful customer engagement. So, um, how are they, uh, determining the return on investment here and, um, how are they seeing if it's returning that meaningful customer engagement? Yeah, so I, I think return on investment on AI is, is a very challenging thing for a number of folks to, to, to measure.

And I do think, uh, we were exiting sort of a stage of, uh, you know, heavy, heavy focus investment on AI and sort of waiting to see, I think now we're entering the stage of, hey, let's see, what are the returns on some of these AI investments? When you look at the leaders, the leaders are definitely sort of big heavy investors in ai. We've also seen that outside from the leaders, some of the larger companies, right?

So some of the larger companies in our sample set are also big investors in ai. And what we're also looking at is where are they investing in as well? And so some of these, uh, you know, heavy investors in AI are very much focused on front office.

What does that mean? It means that they're focused on areas that are interacting directly with the customers versus things that represent more back office or middle office type operations. So they're focused on sort of customer interaction activities.

They're focused on activities that relate to customer onboarding, for example, or activities around service or sales and marketing. And the reason that really matters is that you can get sort of pretty instantaneous feedback in terms of, uh, the impact, you know, that use of AI in these areas is having, whether it's sort of enhanced customer experience or you're generating more sales, more revenue, or more satisfied customers overall. And so we're seeing the investments go in those areas.

And I think those are some of the areas where you start to see some of the initial benefits overall. I think as time passes by, you'll see more front office, but you're gonna start to see a little bit more in the middle and the back office, right? Those are areas that touch upon things like risk or or, or operations or compliance.

Uh, and eventually you'll see it in other areas like security or, uh, you know, training, et cetera, which will be more sort of around, you know, corporate or IT priorities as well. And of course we're hearing a lot about the AI implementation, but did your survey touch on other technologies that business leaders are, are trying to harness or implement? Uh, absolutely.

And so, uh, AI is one sort of, we also looked at sort of what, you know, folks would consider to be, uh, next gen technologies, right? And around sort of these next generation technologies like which are the ones that people are very, very much focused on. So, you know, one example will highlight regards to next gen technology is blockchain or distributed ledger.

And so there we see some, a number of folks expressing interest and activity, uh, in the area of distributed ledger. And so, uh, you know, that's one of the key sort of areas of emerging technology that comes up. But other areas that have come up as well include folks looking at things like, uh, quantum computing, for example, is another area that has come up.

I think that one's a little bit further down the road. You know, I think ai, gen AI is at the top. Uh, we're seeing sort of other emerging things such as quantum that other sort of things on the horizon know, such as, uh, what we mentioned around, you know, uh, uh, quantum et cetera as well.

What are some other key takeaways from that survey that you can share? Any other important stats that came from that survey? Yeah, look, I think fundamentally, uh, it's very important to get engaged, right?

It's very important to, uh, be active and the, the, the proof is here, right? Companies that invest, um, are likely to reap the benefits and become more mature and become leaders in digital transformation. And digital transformation is something that, that allows you to provide to a, a much more compelling offering to your customers.

And what I mean by that look, uh, engaging doesn't just have to be sort of investing sort of huge sums of dollars. And I think that's something that, that comes up very clear. I think, you know, you have companies that, uh, you could not just invest, but you can experiment and you could experiment.

It doesn't have to take a lot to experiment. You know, some of the companies, for example, in blockchain that have experimented in blockchain, uh, you know, these are companies that essentially started it off with something as simple as minting Bitcoin. Uh, it doesn't take a significant budget to do that, but once you experiment, you start to get a sense of what this entails, you also start to learn about it.

And you have people that start to learn about as well. 'cause you have to build up that talent base. Another thing that you can do is just sort of engage with the ecosystem, right?

So you experiment but also engage with the ecosystem, right? Engage with other companies that are like-minded, engage with, uh, trader organizations, you know, that support what you're trying to do, uh, engage with academics, right? Engage with sort of investment bankers, venture capitalists, other investors, and engage with peers as well, right?

There's so many different ways to engage with the ecosystem that provides you with another opportunity to learn, uh, and again, sort of become engaged overall with the opportunities and with digital transformation. I think the final area I'll highlight is partner, right? And so you can always also partner with somebody, partner with an entity or startup, et cetera, to again, you know, get involved.

And so that's one of the things that, you know, it's very clear here is that, you know, there is a widening of the gap between leaders and not leaders, but you wanna get engaged because, you know, once you get engaged, you really start to see the benefits overall. And it doesn't take, so a huge multi-billion dollar or multi-million dollar budget to engage. So what are some of the tips that you have for business leaders when it comes to getting all the staff adopting this technology, and also from an education standpoint, um, there's a bit of a skills gap sometimes.

So, uh, what are your tips for providing education to the staff? Yeah, look, I think we, we think that there are several aspects to this, right? Uh, there is a skills gap, uh, and you know, we, it's critical to close the skills gap.

So training, you know, has to be a critical dimension of this. As we think about, uh, sort of one of, and that's one of the core dimensions that we highlight when it comes to, to the 10 dimensions that I mentioned. You know, one of 'em is around culture.

It's around talent, right? It's around the people that we have and the digital skills and the talent that they do have. And so what we see is when we look at companies that are leaders, for example, uh, right, the leaders, you know, they invest in these areas, but nevertheless, uh, and, and you know, there's a huge difference.

When I say huge differences, it's almost a six x difference in terms of, you know, the percent of leaders that are what we call in the advanced stages of talent and the percent of non-leader that are in the advanced stages of talent. So there is a noticeable gap in terms of the investment there. And you know, what we encourage everyone to do, again, is it, it it's just takes a little start, right?

So a number of companies that we have observed is to start training at the top, right? And then so they disseminate from the top to the next layer and the next layer and the next layer, right? And you pick up the evangelists along the way who could again, further evangelize with these emerging technologies and this training to other people in organizations.

The reason that really matters is because that also helps you identify use cases, right? And as you identify use cases and those people are evangelizing it, they can then sort of mobilize. So the more junior ranks, you know, to be active and engaged in that.

And so it's very critical and we've seen a number of firms that really pursue that, which is, let's make sure we get the buyin from the top. We have to buy in at the bottom. And sometimes you have very enthusiastic junior people that are embracing these emerging technologies, that are embracing ai, that are embracing blockchain, that are interested in quantum.

Uh, but if they're the only ones that are interested, it's not gonna be significant traction that you need. So if you gotta, you do have a little bit bottoms up, but you really need some top down evangelization as well. Awesome.

So if there was one final thought that you could leave our audience with today, what would that be? I think it is, it's when you, one of the things that you know, was very noticeable in terms of our survey is around sort of customer obsession. And, and what I mean by that is I think in the past, you know, there's always been significant focus on we wanna be efficient, we wanna be sort of very cost centric, et cetera.

What we're seeing now is in order to better serve your customers, you have to be advanced when it comes to creating sort of a seamless digital experience for your customers, right? Customers are now looking to engage, right? And so how is it that you better engage your customers, right?

And that's the next frontier of providing your customers a richer experience. And that's where digital transformation comes in, right? Digital transformation comes in because when you think about what does it take to provide our customers with that next level client experience, oh wait a second, uh, that's really hard to do unless we transform ourselves because the way we've normally been doing it, it's not gonna cut it.

And so, uh, if we don't want it to be lost in all of this, that fundamentally comes down to the customers and the kind of experience that they want. And a great way to highlight this is, you know, as we all emerge from pandemic, right, of the pandemic, let us realize that sort of digital transformation was needed, especially as the channels of interaction were changing. You went from what was sort of a brick and mortar world into a virtual world, different channels of interaction that for companies that were not digitally ready, that was very difficult.

Right? And that's the same thing with digital transformation as a whole. Uh, fundamentally we're talking about our customers and how do we orient ourselves again, so these 10 markers of success when it comes to digital transformation to better serve our customers.

So let's just not lose sight on customer needs and what our customers want. Yeah, absolutely. And those needs are only increasing in this digital world.

They expect a lot more than they used to. Exactly. Yeah.

Well, thank you so much for coming on our podcast today and sharing your insights and the results of the survey. And I want to thank our audience also for tuning in. Let us know what interested you the most from this conversation, and have a wonderful day.

Thanks again.