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Risk Technology Awards 2018: Broadridge

Jerome Hoffman – Broadridge
Jerome Hoffman

Managed support services provider of the year

Broadridge offers advanced real-time transaction processing services that automate securities transaction lifecycles, from desktop productivity tools, data aggregation, performance reporting and portfolio management, to order capture and execution, trade confirmation, margin, cash management, asset servicing, clearance and settlement, reference data, reconciliations, accounting, compliance, and regulatory reporting. 

Hosted in state‑of‑the‑art data centres and on the cloud, Broadridge’s services process clearance and settlement in more than 80 countries. Its multi‑asset, multi‑market, multicurrency and multi‑entity applications support real‑time global trade processing of equity, fixed income, mutual funds, foreign exchange and exchange-traded derivatives in established and emerging markets. Its services offer high degrees of scaling, redundancy, reliability and flexibility, as well as 99.9% availability. Broadridge’s data protection is aligned with the National Institute of Standards and Technology’s Cybersecurity Framework and the company is ISO-27001 certified.

Broadridge processes nearly $6 trillion in equity and fixed‑income trades daily in North America, as well as processing equity trades for seven of the 10 largest global investment banks, including billions of US institutional trades each year. The company provides fixed-income and repo processing for 18 of the 23 primary dealers, representing more than 60% of the daily trade volume. It has 45 clients on its operations-managed services, including seven primary dealers that collectively account for more than 25 million customer accounts and an average of 2.9 million trades per day. 

Broadridge’s managed services are highly customisable and help clients adapt to new regulations while mutualising operations and innovation costs, and increasing operational efficiency, governance and risk mitigation. Broadridge has a strategic collaboration with Accenture and its global business process outsourcing capabilities to provide services in Europe, the Middle East and
Africa, and Asia-Pacific.

Broadridge collaborates with clients to apply new technologies in innovative ways. Recent examples include an artificial intelligence application to identify trade allocation requests in unstructured data, and a pilot using distributed ledger technology to streamline and automate end-to-end processes for bilateral repo agreements and confirmations. 

Michael Alexander, president of Broadridge Wealth and Capital Markets Solutions, says: “Broadridge is a global fintech leader with $4 billion in revenue that provides communications, technology, data and analytics. This Risk Technology award is in recognition of the deep industry expertise, operational process excellence, leading technology and innovation, and proven governance that we offer with our managed services and through which our clients are able to realise unlimited business potential. Our clients benefit from being part of a network that leverages shared investment and scale, and mutualises costs to drive return on investment. We help transform businesses so they are ready for what is next.”

Judges’ comments

“Excellent coverage and range of services, with a wider user base”

“Best of breed. The company is tangibly helping its clients move into new technologies such as artificial intelligence and distributed ledger technology”

Winner’s interview

Over the past decade, Broadridge Managed Services has matured its offering into an industry‑leading utility focused on post‑trade operations processing and has landed the 2018 managed support services provider award. Michael Alexander, president, wealth and capital markets solutions at Broadridge Financial Solutions, discusses the role of technology in managed services and the opportunities for further centralisation in the industry 


What market trends are driving change in the managed services space?

Mike Alexander – Broadridge
Michael Alexander, president, wealth and capital markets solutions, Broadridge Financial Solutions

Michael Alexander: About 13 years ago, Broadridge acquired a broker‑dealer and combined four decades of brokerage operations expertise with its post-trade processing technology services to create the Broadridge Managed Services offering. At that time, outsourcing was predominantly about saving costs – which remains an important consideration – but the conversation has shifted to how firms can simplify their operating models, increase the use of utilities and accelerate the adoption of new technologies to drive innovation.

In recent years, brokerage firms have become more comfortable outsourcing complex functions to trusted service providers that have the expertise, scale and capabilities to accelerate the time to value. As a strategic partner and an extension of its firms’ operations, Broadridge Managed Services provides mutualisation; governance, transparency and risk mitigation; leading technology and world‑class operations; people, practices and thought leadership; and transformation, innovation and network value to clients. ‘Network value’ is a term that describes the increase in value of an offering for its users emanating from its collective usage. This network effect creates transformative opportunities for participants and the industry as a whole, which individual firms would not be able to achieve within their infrastructure or within limited consortia. 


Why are these capabilities important to managed services clients in today’s market?

Michael Alexander: In terms of governance, transparency and risk mitigation, there is focus on how outsourcers provide visibility, process automation, standardisation and shared outcomes to mitigate risk from a succession planning, transition and ongoing performance perspective. Firms are looking for a partner that provides complex outsourcing services combined with an outcomes‑based model where the outsourcer shares the risk and invests in innovative technology to improve service delivery while expanding its scope of services. A unique aspect of Broadridge’s service is that it retains a broker‑dealer licence, which ensures a dual audit mechanism. There is no conflict of interest since Broadridge does not trade for itself, but having the licence allows associates to maintain industry registrations.

The brokerage operations industry has suffered from market pullbacks, retirements and a lack of talent entering or remaining in operations, which has made succession planning a key concern for firms. Broadridge’s brokerage operations is a centre of excellence and the core of its managed services offering. We are continuously hiring the best of the best from firms that use Broadridge’s services, and this diversity of thought provides multiple perspectives and process disciplines across the operations team.

Broadridge has invested more than $1 billion over the past five years in organic technology development and strategic acquisitions, which helps clients stay ahead of the competition. We have invested in process automation through workflow tools and robots, introduced artificial intelligence (AI) and machine learning (ML) concepts, and the firm is an active test bed for implementing new technologies.

Broadridge’s industry presence allows us to stay abreast of initiatives and regulations and advocate on behalf of our 45 clients. Being part of this network presents clients with an opportunity to benefit from innovative solutions that cannot be realised within the four walls of a single firm.


How is technology affecting managed services offerings?

Michael Alexander: Broadridge leverages digital labour, which is its name for its robots, and firmly believes there is a technology‑human partnership in most functions. Broadridge has introduced AI and ML concepts in multiple areas where tasks were repeated or translated unstructured data into information that could be processed by the system.

Broadridge has developed real‑time dashboards and supervisory tools, providing the confidence our clients need to outsource complex functions. For instance, government settlements, which started six years ago, perform around $24 trillion each month.


What can clients expect from Broadridge going forward? 

Michael Alexander: Broadridge is constantly looking to improve service standards in its existing offerings, provide more tools for greater transparency and introduce new, complex functions that can drive greater adoption by clients. There are plans to introduce new solutions for foreign exchange, buy-side, governance, risk and compliance, and over‑the‑counter derivatives. Broadridge’s network value initiatives, such as fails processing and transfers, are identifying unique solutions that bring together multiple clients onto its platform.

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