3095: The Tech-Driven Future of Finance at Broadridge

[00:00:04] Have you ever wondered what drives digital transformation in the complex world of financial services?

[00:00:10] Well, today we're going to talk about all this and much more with my guest.

[00:00:15] His name's Rob Krugman. He's from a company called Broadridge.

[00:00:18] And in an industry where blockchain, machine learning and AI are not just buzzwords, but real tools shaping the future.

[00:00:26] A question I want to ask is how is Broadridge staying ahead of the curve?

[00:00:30] What strategies do they employ to ensure they're not just participating in a digital transformation, but helping to lead it?

[00:00:39] Well, Rob's going to share his insights in everything from fostering a culture of continuous learning

[00:00:44] to the role of AI in enhancing customer experiences and the critical aspects of successful digital transformation strategies.

[00:00:53] We've got a lot to get through today, so let's get him on the show now.

[00:00:58] So, a massive warm welcome to the show. Can you tell everyone listening a little about who you are and what you do?

[00:01:05] Sure. My name is Rob Krugman. I am the Chief Digital Officer for Broadridge, which means different things to different folks.

[00:01:12] For me, it means that I do a lot of work around digital strategy and transformation.

[00:01:17] And I run an innovation lab, which we call 605 Studios, where we work on disruptive future-looking innovations and capabilities within financial services.

[00:01:28] Well, one of the big reasons I invited you on the podcast today was after reading Broadbridge's latest digital transformation and next-gen report,

[00:01:37] which highlights an increasing gap between leaders and non-leaders in digital transformation maturity.

[00:01:43] I suspect a few people have seen that gap first-hand out there.

[00:01:47] But what do you believe are the key factors that have contributed to this widening gap?

[00:01:52] You know, I think it's a few different things.

[00:01:54] You know, number one is that, you know, any established business, it's a real challenge to prioritize between transformation and the future and firefighting.

[00:02:09] And often what happens is the firefights get prioritized because it's about satisfying client needs, checking the boxes, making sure that you're actually delivering on a constant basis.

[00:02:19] It can be really hard to create that methodology and that framework to also have time to look at the future.

[00:02:25] I think that's number one.

[00:02:26] I think number two is one of the challenges a lot of organizations have, and I don't think there's any organization that's really immune to this, is in regards to digital talent, right?

[00:02:36] You know, specifically the financial services industry.

[00:02:39] If you think about the top tier digital talent likes to work for companies like Google and Facebook and Amazon, and you know, there's a next layer down.

[00:02:51] And sometimes they're just as good that may work for some of the large, you know, wire houses or multinational banks.

[00:02:56] But if you're a mid-tier institution or a smaller institution, it could be really hard to get access to that level of talent internally.

[00:03:03] So you often have to go externally to pull it in, which could be both expensive and require a much longer thought process as far as how you're going to do those projects and how you're going to fit them in.

[00:03:13] And a big stat in that report was that 75% of firms are expressing confidence in their digital transformation journey, but only a third have reached the advanced stages of customer experience, modernization and data management.

[00:03:28] So what are the main barriers preventing firms from progressing further in these areas?

[00:03:35] You know, I, I, one of the challenges in digital transformation is stepping out of the day to day, right?

[00:03:41] So I like to, you know, Amazon calls it working backwards.

[00:03:46] Other people call it design thinking.

[00:03:48] One of the things that's often forgotten when it comes to digital transformation is that it's not necessarily about the internal.

[00:03:56] It's about the external.

[00:03:58] And a funny thing happens is that when you focus on the needs of the external, your clients, your customers, that's where customer experience drives the day.

[00:04:05] And so if you ask yourselves questions specifically in regard to what value proposition, what is this adding to that end customer experience, that end customer value?

[00:04:17] If you work from there and you work backwards and kind of understand the impact on your internal systems, your likelihood of success is going to be much greater because you're prioritizing the items that matter.

[00:04:27] When you work internally forward, you tend to focus on things that you think are problems that not necessarily the problems that your clients believe they are.

[00:04:36] Another massive stat in a report that revealed 71% of leaders have advanced in implementing digital skills and talent strategies compared to only 12% of non-leaders.

[00:04:49] So what are the key strategies that leading firms are using to develop their digital talent?

[00:04:54] Anything you could share there?

[00:04:56] So I think there's a few factors to this particular one.

[00:05:01] You know, number one is this concept of continuous learning, right?

[00:05:07] Are you providing your internal folks the time that they need to, again, go outside, read and educate themselves about the various trends that are happening?

[00:05:16] Because it's really important that you understand those things.

[00:05:18] Those are the external trends that are going to affect your business long term.

[00:05:21] And if you're not paying attention to them, that's how you miss.

[00:05:24] That's how you get disrupted.

[00:05:25] That's how these changes start to happen.

[00:05:26] I think the other part of it is, how do you really educate talent and provide the skills that are going to be required to move forward, right?

[00:05:36] And, you know, if you think about some of the hotter technologies in the financial services space today, like AI, blockchain, machine learner, are you providing opportunities for your folks to go out and receive the proper education?

[00:05:53] Number one, number one, but then number two, providing the mechanism for them to implement those capabilities when they're working internally.

[00:05:59] And, you know, one of the examples, I was at a conference recently, and someone was talking about AI.

[00:06:06] And we just use that as an example.

[00:06:08] And the point that was made was, you know, if you're not using AI every single day, you're falling behind every single day.

[00:06:16] And it's a really important perspective because, you know, I think folks get again, people get focused on the day to day.

[00:06:22] I keep coming back to that.

[00:06:23] You know, you get focused on the tactical.

[00:06:25] It's important that you step up and you understand what these tools can do.

[00:06:28] And it could just be, you know, essentially running some tests, playing with some of these things to understand the impact they can make.

[00:06:35] Because when you start to understand that, you quickly understand the benefit of value that these brings versus being scared of them.

[00:06:41] And I think sometimes, you know, there's also this people are scared of change.

[00:06:46] We all know that because of the unknown.

[00:06:50] And that sometimes the people that are not leaders, you know, I think that sometimes that concern of the risk or the scared of change that exists stops them from doing anything.

[00:07:00] Yeah.

[00:07:01] And I think with AI investments, increasingly prioritizing customer interactions and something like I think it's 70% of leaders are focusing on AI to drive meaningful engagement.

[00:07:13] I'm curious, how do you see AI transforming customer experiences in areas like financial services?

[00:07:20] And what are some of, are there any successful examples that you've seen out there?

[00:07:24] Because I'm conscious we are very early on this journey, but is there anybody that you've seen that are doing it well?

[00:07:29] There are quite a number of really good examples.

[00:07:33] You know, I think what it starts with is, you know, recognizing that, you know, in a regulated industry like financial services, there is always going to be concern around the accuracy of the AI results.

[00:07:45] Right?

[00:07:45] So what that means, you know, is where do we start and how do we get comfortable with this?

[00:07:51] So I'll give you a few examples.

[00:07:53] I know, you know, the team at Morgan Stanley has introduced a number of tools that really take all their data and content internally and simplify life for their financial advisors by allowing them to ask questions, gather the information, and then take that information in and then provide it themselves.

[00:08:11] So there's a human in the loop model where they're then talking to their customers.

[00:08:15] The, you know, so what we're seeing is we're seeing things like that, the chat bots, right?

[00:08:19] We all kind of know about the emergence of all the bots.

[00:08:21] I think the other area is related to forms, right?

[00:08:25] We're seeing a lot of things.

[00:08:25] The insurance industry in particular is a good example of this, where you submit a claim and information is required to fill out that particular claim.

[00:08:33] It used to be that you'd have to fill out pages and pages of paper or PDF documents.

[00:08:38] You'd send them in, they get returned because you forgot something.

[00:08:42] You'd send them in, they get returned because you didn't fill it out right.

[00:08:45] And you had this back and forth that was literally costing hundreds of dollars per claim.

[00:08:48] I think the inclusion of AI to help fill out those forms in customer service, you're starting to see that all over the place.

[00:08:55] I think the big question though is when do we take that next leap, right?

[00:08:59] When do people feel comfortable with the results and the decision-making that's happening within these AI tools to start to streamline additional processes?

[00:09:09] And what we're seeing, again, is people are getting more comfortable with that.

[00:09:13] Now, if we go to customer experience in particular, this is where I think there's going to be massive movement over the next few years.

[00:09:19] So I think the first thing that you're going to see is going to be, you know, we all kind of work in this concept of user personas where people are leveraging AI to identify what is appropriate for this individual based upon their persona or what we know about them.

[00:09:36] I think longer term, what we're likely to see is this concept of real-time experiences, right?

[00:09:43] So rather than personalization, I'm speaking to Neil or I'm speaking to Jane or I'm speaking to Jim.

[00:09:50] What do we know about this individual?

[00:09:52] We have a library of modules, experiential modules that we could leverage.

[00:09:57] Based upon what we know, let's create a unique real-time experience for this individual that's going to be very different than the next individual and the next individual.

[00:10:05] So, you know, we're eventually going to get to that place where that experience that you interact with is going to be 100% personalized for you, right?

[00:10:14] We're still kind of at that persona level, but when you get to 100% personalized for you, you can think about the power of that because then, you know, it's a much more comfortable interaction for the end consumer because when they're communicating with you, it's basically on their terms and what we know about them.

[00:10:29] And that'll evolve and I think that'll grow even further.

[00:10:33] And in my former IT life, I did see so many different big tech projects either run into problems or fail because they focus more on the technology and less on the workplace.

[00:10:45] The people, it was impacted by that technological change.

[00:10:48] And here we are now with another big, big change with AI.

[00:10:52] And digital transformation is often associated with technology, but how important is that cultural shift within organizations, especially in order to achieve success in any transformation effort?

[00:11:04] You know, it's interesting.

[00:11:06] I've thought a lot about this.

[00:11:07] I've thought a lot about this kind of on the operational side of things, right?

[00:11:10] Right.

[00:11:12] Because with any technical revolution, there's going to be concern that exists that is my job in danger, right?

[00:11:21] I mean, it's just natural human behavior to ask that question.

[00:11:25] I think at least right now what we're seeing is that this technology is not going to replace jobs.

[00:11:31] It's going to kind of make people into super humans, if you will.

[00:11:34] It's going to make things easier to do.

[00:11:36] It's going to allow them to see a little bit further.

[00:11:37] Now, will jobs change and will they adopt?

[00:11:40] They definitely will, right?

[00:11:41] We're going to streamline things.

[00:11:43] The amount of human intervention that's required to do certain tasks, there is no doubt is going to be reduced.

[00:11:50] But ideally, what that means is that people that are in those roles now are actually in a, they're making the more complicated decisions in that loop.

[00:12:00] So, they're moving up the chain, if you will, as far as the decision-making process because the underlying technology is supporting us beneath the scenes.

[00:12:10] I know I think a lot of this, it's open for question though.

[00:12:14] And I can understand the concerns that exist because we've all watched movies and we've all seen things that freak us out a little bit.

[00:12:21] Yesterday, I watched the robot introduction from Tesla of a bunch of robot humans walking around and interacting with people.

[00:12:29] And I get really excited about that because I'm a technology nerd.

[00:12:32] I am sure that there are people that watch that.

[00:12:34] And the first thing that came to the mind was the Terminator movies and the Matrix movie and said, uh-oh, it's all over.

[00:12:43] 100%.

[00:12:43] The only thing missing was the red eyes from them.

[00:12:46] Exactly.

[00:12:47] And weapons.

[00:12:48] Fortunately, there were no weapons on anyone.

[00:12:51] Now, given your experience leading engineering and technology initiatives, how do you ensure that digital transformation efforts at Broadridge are aligned across different sectors from capital markets to wealth and asset management?

[00:13:07] Because I would imagine it's a quite fine balancing act.

[00:13:10] But how do you do that?

[00:13:11] So, you know, I think I should highlight.

[00:13:13] So, in my role, I don't run the technology and engineering organizations.

[00:13:16] I've done some of that in the past at other places.

[00:13:19] Here, I really interact with the engineering and technology organizations.

[00:13:22] And so, what I view my job is to highlight what types of technologies we should be looking at.

[00:13:31] What do we think the future impact of those technologies can be in a particular space?

[00:13:35] And then cascading that down to the organization to highlight these are the types of things that we should be thinking about.

[00:13:41] Because, you know, to your point, in any organization, there's different business units.

[00:13:45] They're focused on different things.

[00:13:47] They have different client bases.

[00:13:49] But many times, the underlying technology is going to affect all of those businesses.

[00:13:54] So, how do we look at a set of technologies and then answer the, or ask, is probably really the better question, ask the appropriate questions of, what do we think the impact this is going to have on capital markets?

[00:14:08] What is it going to have on wealth?

[00:14:10] What is it going to have on the asset management community or the private equity community or other communities that are out there?

[00:14:17] And then, based upon those answers, you start to understand how you can deploy this information.

[00:14:21] What's common and what's unique, right?

[00:14:24] So, I'll give you an example.

[00:14:26] I look a lot.

[00:14:27] I've been doing a lot of work in the blockchain space, right?

[00:14:30] And I think sometimes, you know, the blockchain and the crypto space get smashed together.

[00:14:34] And they really are two separate things, though crypto is interesting as well.

[00:14:37] But on the blockchain side, we're seeing this massive movement towards tokenization, right?

[00:14:42] That opens up many questions about what does the future look like, right?

[00:14:48] Do wealth firms continue to function the way that they do?

[00:14:50] How are they going to process and clear trades?

[00:14:52] What's the role of capital markets?

[00:14:54] Are asset managers going to be able to go directly to consumers and are going to be able to distribute in a decentralized way?

[00:15:00] So, these are all important questions, I think, that organizations need to be asking about that particular piece of technology.

[00:15:06] And I think for, as we see these trends emerge, it's really important to ask that.

[00:15:11] You start at the top, you understand what it is, and then you cascade it down to think about what is the potential impact on each of these businesses in each of these areas where I'm trying to grow or I'm trying to maintain and sustain my business.

[00:15:24] And for anybody listening in our conversation is resonating with them today, is there any advice that you'd offer to an organization that are still maybe in those early stages of that digital transformation journey, particularly around overcoming challenging modernization and data management, etc.?

[00:15:45] Any advice that you would pass on to those people listening?

[00:15:49] I think the only way it works is if there is a mandate from the top down, right?

[00:15:55] And that doesn't mean that everything is driven from the top of the organization down, but it means that there's a comfort level from the C-suite down throughout the rest of the organization that we need to transform ourselves.

[00:16:06] And that transformational journey is not going to be a straight line.

[00:16:10] It is going to have pitfalls.

[00:16:13] It's going to have failures.

[00:16:14] But we're prepared to iterate based upon those experiences to get us to where we need to go.

[00:16:19] I think that one of the challenges a lot of organizations have is they make a decision to do something.

[00:16:27] And they're not constantly iterating or reviewing that decision to make sure it's the right decision for them.

[00:16:34] And so they end up spending millions or tens of millions or hundreds of millions of dollars.

[00:16:39] And at the end of the day, they're digital transformations of failure because they didn't work on the right things.

[00:16:44] So, you know, one thought is start small, right?

[00:16:48] Start with experimentation.

[00:16:50] Start with proof of concepts.

[00:16:51] Make sure that research is embedded into everything that you do.

[00:16:55] So when you actually start these ideas, these transformational ideas, you're constantly putting them in front of folks, whether those folks are your customers, prospective customers, internal customers, other stakeholders.

[00:17:07] Gather their feedback throughout the process and be prepared to iterate the way you actually solve for those.

[00:17:13] Because, again, nothing is a straight line when it comes to digital transformation.

[00:17:17] And I think when folks think that that's the way it's going to work, that's where failure is going to happen most likely.

[00:17:25] And 2025 is now within touching distance.

[00:17:29] So if I was to ask you to look ahead into next year and beyond, how do you see the role of emerging technologies like AI and machine learning and advanced data analytics?

[00:17:38] How do you see these things evolving in the financial services sector?

[00:17:42] And, again, how can firms bear prepared to stay competitive in this rapidly changing landscape?

[00:17:49] So I often talk about like a trifecta of technologies I see coming together in financial services that they're not going to transform financial services.

[00:17:57] They're going to disrupt financial services.

[00:18:00] And that trifecta is blockchain as the underlying ledger, machine learning, and AI.

[00:18:07] And so what do I mean by that?

[00:18:09] Imagine a world where transactions are all clearing real time in a decentralized manner on a global basis, right?

[00:18:17] There's no end of day.

[00:18:19] There is markets operate 24 by 7.

[00:18:22] Even the most illiquid assets are now liquid.

[00:18:24] You then have a machine learning layer that real time is looking for anomalies.

[00:18:30] What patterns are we seeing in the actual data that either highlight potential risk, potential opportunity, or potential fraud even?

[00:18:41] And then how do we leverage AI on top of that to help to make decisions and bring the appropriate information to the appropriate people internally

[00:18:50] so that they can actually review it, understand it, and then make a decision going forward, right?

[00:18:56] That's a lot of where, as I connect the dots, I see us heading in that direction.

[00:19:01] Now, is it 2025?

[00:19:03] It'll start.

[00:19:04] Is it three years?

[00:19:05] Is it five years?

[00:19:06] I think it's probably in the five-year horizon we're going to see a massive change in the way the infrastructure works.

[00:19:11] Now, that's going to challenge a lot of organizations because it's going to change the way and the functions that are most important for those organizations

[00:19:19] and how they work and how they think about it.

[00:19:21] I think that, so what do you need to be doing as an organization to stay ahead, right?

[00:19:26] So number one is you need to be educating yourselves in all of these things and understanding what are the limitations of these technologies today

[00:19:33] and what's the promise of these technologies because they're very much different things, right?

[00:19:37] Like you look at the promise of AI and everyone's like, woohoo, it's going to change the world completely.

[00:19:41] You look at the reality, you recognize that technology is still not a level of maturity that can do everything that we potentially want,

[00:19:48] but let's understand what that journey is going to look like so we can be on board for that journey.

[00:19:53] And so, again, I'm going to go back to that mandate and dedication.

[00:19:58] Embrace these tools, educate yourself on these tools, create a strategy, but not a little S strategy, a big S strategy.

[00:20:07] What's the vision for our firm in the year 2030, in the year 2035, right?

[00:20:13] And if we have that vision out there and we work backwards based upon what we know from a technology perspective right now,

[00:20:22] that's a great place to start.

[00:20:24] The second piece of that, in my opinion, is the iteration, right?

[00:20:29] Recognize that that vision statement, that direction together, whether it's one year, whether it's five years,

[00:20:34] whether it's 10 years down the road, is likely to be impacted significantly by market developments and technology developments that we don't understand yet.

[00:20:41] So make sure that when you're building these things, you're also building in this iterative circle,

[00:20:46] that you can constantly question what it is that you're trying to do, evolve it, and move forward in different ways.

[00:20:52] I love that.

[00:20:53] And of course, there is a very real pressure on everyone to be in a state of almost continuous learning now.

[00:20:59] So I've got to ask someone that's leading the way in this field, where or how do you self-educate?

[00:21:06] Any tips that you could share on how you keep on top of the pace of change?

[00:21:12] So I've been referred to as Willy Wonka in some cases, as a guy who's responsible for innovation.

[00:21:17] I tend to be more of a futurist and I think and I look at different things.

[00:21:22] But one of the things that I try to do is I read everything, right?

[00:21:25] So some of it's on social media, some of it's books.

[00:21:31] I like to kind of differentiate between the Twitters of social media, which I do read a lot,

[00:21:36] but also the LinkedIns of social media.

[00:21:38] I find it really important to read as many different perspectives that are out there and

[00:21:43] new technologies and then investigate those to see what's true and what's not and what people think

[00:21:47] about.

[00:21:48] And so my learning experience has always been that, number one, I want to read as much as

[00:21:57] I can so I can learn about new technologies.

[00:21:58] Part of it's my tech geek and I just want to know what they actually do.

[00:22:01] But number two is surrounding myself and in my network of folks that I actually follow

[00:22:07] or that I know, people that I believe are smarter than me and are thinking about things

[00:22:11] differently than me.

[00:22:12] Because the other aspect of learning, and I always joke, people always ask like, well,

[00:22:17] what's like the, if you look back at your career, what's the one thing that enabled you

[00:22:21] to kind of move ahead further?

[00:22:22] And what I always look to is, and it's a funny thing, but I took the Briggs Myers test,

[00:22:29] right?

[00:22:29] Isn't that what it's called?

[00:22:30] The personality test.

[00:22:31] And I was sitting in a room and I know how I think and the way I think is very innovative.

[00:22:36] Like, I know I can't go and do the same job every single day.

[00:22:39] But then I saw other people scored in that.

[00:22:41] And I was like, oh, that's why they're that way.

[00:22:44] They think differently than I do.

[00:22:45] And it was such a realization that, yeah, I don't care about making the donuts every single

[00:22:53] day and making sure they're absolutely right.

[00:22:54] I want to create the next donut type.

[00:22:56] But it's really important that we have people that create those donuts the same way every

[00:23:01] single time.

[00:23:01] And I think learning that from an experiential perspective and then surrounding yourselves

[00:23:05] with people that have different perspectives and different things really helps with self-learning

[00:23:09] because they're going to ask questions that you never even think about and frankly probably

[00:23:13] don't even care about.

[00:23:14] And you're going to ask questions that they don't think about and they don't care about.

[00:23:18] And I think having that really helps you to learn and educate yourself on a long-going

[00:23:21] basis.

[00:23:23] Yeah, it really is a big game changer.

[00:23:25] I've done that myself.

[00:23:26] And it all just gives you that epiphany of, hey, not everybody's like me and we all think

[00:23:31] differently and process information differently.

[00:23:34] I tend to usually take those tests and I find that I'm like the guy that's like in that

[00:23:37] 1% group of weirdos that think this way.

[00:23:40] But that's okay, right?

[00:23:41] As long as, you know, I can be in that 1% group as long as we have the other groups

[00:23:44] well represented so that we can make sure that we don't blow things up.

[00:23:50] You and me both, my friend.

[00:23:52] But anyone listening that would like to find out more information on the report, we discuss

[00:23:56] the work that you're doing, contact you or your team.

[00:23:59] Is there anywhere you'd like to point everyone listening?

[00:24:02] Sure.

[00:24:03] So you can go to, obviously you can go to broadridge.com where we post a lot of the information

[00:24:06] that we're doing.

[00:24:07] My LinkedIn handle is Robert Krugman.

[00:24:10] So R-O-B-E-R-T-K-R-U-G-M-A-N.

[00:24:14] And I post a lot of information about what it is we're working on and things that I find

[00:24:17] interesting.

[00:24:18] And you can always reach out to me directly, which I'm always happy to connect and discuss

[00:24:23] different interesting topics.

[00:24:24] Well, thank you so much for sitting down with me today.

[00:24:27] We covered so much there.

[00:24:28] And I do urge anybody listening to check out that digital transformation and next-gen report,

[00:24:33] which does explore beautifully the gap between leaders and non-leaders, how it's widening

[00:24:39] as digital transformation in financial services reaches that new level of maturity.

[00:24:45] Some big stats in there.

[00:24:46] So I will put a link to that.

[00:24:48] And again, for anybody listening that wants to carry on the conversation we started today,

[00:24:52] let me know.

[00:24:53] I'd love to hear your thoughts on this.

[00:24:55] But more than anything, thank you for helping me start this conversation today.

[00:24:58] It's been a real pleasure talking to you.

[00:25:00] And thank you very much for having me.

[00:25:01] I appreciate the time and look forward to speaking again in the future.

[00:25:05] Big thank you to Rob there for talking about the digital transformation journey at Broadridge

[00:25:10] and discussing the importance of that top-down mandate, the innovative trifecta of blockchain,

[00:25:16] AI and machine learning, and how all these technologies are poised to revolutionise financial services.

[00:25:23] But what strategies have you seen effective in digital transformation within your sector?

[00:25:29] Do you think these technologies will meet their transformative promise, those future promises

[00:25:35] within the next five years?

[00:25:36] I want you to share your thoughts and keep this important dialogue going.

[00:25:41] So email me, techblogwriteroutlook.com.

[00:25:43] Connect with me, LinkedIn, X, Instagram, just at Neil CQ.

[00:25:47] But I've taken up far too much of your time for one day.

[00:25:50] I will be back tomorrow morning.

[00:25:52] I've got another guest lined up.

[00:25:54] But thank you for listening as always.

[00:25:55] And I will speak with you all again tomorrow.

[00:25:58] Bye for now.