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Heard at Ops: Broadridge’s Tim Gokey on driving digital transformation

As part of the Heard at Ops series with top operations and technology leaders, Tim Gokey, Chief Executive Officer of Broadridge Financial Solutions, Inc., discusses the challenges as well as the top trends that are driving digital transformation in the capital markets.


Q. What is the industry’s biggest challenge?

A. The big challenge and opportunity is around digital transformation. How do firms drive the business changes made possible by modern technology, which will bring simplification and enable faster change, greater efficiency, and better client experience? We are also seeing more regulatory change than at any time since the Global Financial Crisis. These regulatory changes will require the industry to come together with regulators to share information and provide detailed knowledge.

Managing those two things at the same time – meeting the regulatory change challenge, including the move to T+1, while not losing momentum on digital transformation – is the challenge for the industry.

Q. Describe the top trends that you’re seeing and how they can help address this challenge.

A. I see several trends:

  • Moving to API-driven, cloud-based technology – Everyone is looking at their whole product and technology portfolio, how to move the portfolio and how to prioritize that. It won’t be the same for every firm. I urge firms to focus on what is truly differentiating for them. Those who get ahead of change will have real advantages.
  • Simplifying the environment – Many products and services, by asset class and by region, have grown over time and are layered, which has resulted in an overly complex operating environment. We are talking with a North American firm that has more than thirty different order management platforms. How do you bring that together in a way that enables faster, cheaper, and better change in the future? Digital transformation is the opportunity to simplify and bring disparate elements together. There are opportunities for digitization in the fixed income markets, so we see continued change in capital markets as well as wealth management.
  • Modernizing the client experience – The typical wealth management client receives on the order of 120 different communications from their wealth manager each year. Digitization can make this much more efficient, consumable, and engaging for the client while at the same time significantly reducing costs.
  • Exploring digital assets – At SIFMA Ops, there were many discussions about digital assets and crypto; whatever you think about it, the underlying technology will be a foundational element for a number of solutions in the future. There are advantages to putting Repos on digital ledger technology, for example.

And then there’s AI, which is not a separate thing – it is going to be part of everything. To prepare for AI, firms will need to first look at their data, refine it, and get it ready to use.

Q. How is the growing interest in ESG driving change in the capital markets?

A. It is an interesting topic because there are a couple of trends that are changing corporate governance. The first trend is there are a lot of new investors. Each year, we measure the number of individual investor positions, and they typically go up by mid-single digits. Last year, investor positions went up by 26%, and we estimate that they are going to go up by nearly 20% this year. This massive increase in interest is among new and younger investors who are looking at these issues differently than in the past.

The second trend is the growth of ESG as an asset class and in investing. We are also seeing this interest in the number of proposals, which are up 25% this year over last year. And even more interesting is how the level of support is changing. If you look at the voting across all the environmental and social proposals – looking at how many votes were received – it was about 5% five years ago. Last year, it was 40%, up by a factor of eight over five years. There is huge momentum around these topics.

Q. What should the industry be focusing on in the ESG space?

A. One thing Wealth Managers can do is to make access to these issues easier for investors. This year, our updated ProxyVote App is allowing investors to select the topics they are interested in and to get notifications when there is a proposal in something they own. This can also provide an opportunity for firms to differentiate themselves or to cater to those investors with specific interests.

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Tim Gokey is Chief Executive Officer of Broadridge Financial Solutions, Inc.

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