Outlook 2022: Justin Llewellyn-Jones, Broadridge
Justin Llewellyn-Jones is Broadridge’s Head of Capital Markets, North America.
What were the key theme(s) for your business in 2021?
Speaking with one of our clients recently I asked what their top three priorities had been during 2021 and was told: “stability, stability, stability, because without stability you do not have a base to build upon”, and, with the spikes in volatility and volumes we have seen during 2021, continuing to ensure that the Broadridge solutions remained stable, resilient and performant was a key focus area for us as well.
Outside of stability the overarching topic of discussion during 2021 really has been about driving transformation. Whether that has come from the perspective of simplification and consolidation of existing systems, or from the acceleration of settlement cycles, or from the introduction of new technologies to help automate and digitize activity, there has been a palpable desire to progress the initiatives that were already in play and kick start new initiatives by pulling them forward. So, at Broadridge we have spent the year focused on ensuring our clients can achieve greater cost reduction, increase agility, and reduce risk by introducing new and innovative solutions that driving simplification, including through the acquisition of Itiviti that has expanded our global presence and capabilities across the entire trade lifecycle, putting us in a unique position to help firms wherever they see a business need.
What surprised you in 2021?
We are all pleasantly surprised by how quickly the global economy bounced back from the initial COVID downturn. At a time when pundits’ predictions were qualified in terms of weeks rather than months or years, because of the uncertainty with which we were living, to watch the rapid swing from negative outlook to positive was unexpected. Obviously, the pandemic is not over, and there remains a great deal of uncertainty, but the buoyancy in the markets has been interesting to watch.
Another area of surprise was spikes in volatility in some segments of the markets. Whether that was being driven by COVID-19, interest in the “meme stocks”, or interest in alternative assets such as crypto, the surges in volatility and volume was marked. Fortunately, Broadridge did not experience performance or stability issues because our core infrastructure and applications have a tremendous amount of elasticity, and we have ongoing initiatives that focus on continuous improvement.
What are your expectations for 2022?
Based upon the acceleration of initiatives we have seen from our clients; we’re expecting to see a level of intensification around change and how to continue to transform existing systems with a faster time-to-market. At the same time, the reality of having to deliver to the broader regulatory agenda, including accelerated settlement, against the backdrop of the ongoing pandemic and the volatility that it is driving, is going to bring operational risk into focus as a counterpoint. So, we are expecting to see more smaller initiatives that can be executed quickly, and which ultimately help reduce risk and cost. The most obvious place this will be witnessed will be in initiatives focused on the simplification of legacy technology, because firms are embracing a more incremental and componentized approach and moving away from “big-bang” projects. Data initiatives, especially those using technologies such as DLT and approaches such as AI and ML, will also continue to be a focus and of course that also plays back into change being driven by regulatory initiatives such as CSDR and CAT where normalization of fragmented data sets is critical.
What are your customers’ pain points and how have they changed from 1 year ago?
Capital Markets firms are always under pressure to drive digital transformation through the simplification of technology and operations, with the objectives being to reduce costs, reduce risks, improve efficiency and drive business agility. That pressure appears to have intensified over the last 12 months, witnessed by firms bringing forward initiatives to simplify and consolidate their current trading and trade processing operations and technology ecosystems. Those initiatives have to be underpinned by a strong approach to data strategy, and here again we have seen renewed interest in engaging on the plans that Broadridge has in flight around the consolidation of fragmented data sets and the re-use of golden sources of reference data across the entire trade lifecycle.
Another area that remains high on firms’ list of focus areas is regulatory and industry change. Throughout the year there have been a number of initiatives in flight, from CSDR, to CAT to LIBOR/SOFR, and of course we have seen a tremendous amount of interest in accelerated settlements in equities. This focus is nothing new, but I believe we have started to hit a pivot point where the benefits of mutualizing the costs, and risks, of keeping up with regulatory and industry change are accelerating the use of vendor provided solutions.
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