According to a new study titled ‘Broadening Asset Servicing 2025’ by Broadridge, asset servicing volumes are climbing by more than 25 per cent year-over-year (YoY)
The study was made in partnership with the International Securities Services Association (ISSA) and The ValueExchange, and draws insights from over 270 industry leaders worldwide on the innovation, priorities and challenges that are shaping the future of asset servicing.
Amid this surge, the study states that industry leaders grapple with challenges stemming from antiquated processes — often batch-based — and multiple data sources, with up to 67 per cent of asset servicing errors linked to poor data quality.
Legacy technology remains the single-biggest obstacle to asset servicing automation.
Outsourcing has emerged as a critical strategy in the study to manage rising complexity — particularly in tax reporting, event capture, tax reclaims, proxy voting and class actions — where firms that outsource report significantly lower error rates and reduced costs compared to those maintaining in-house processes.
It also states that nearly 60 per cent of total servicing resources were reported as being consumed by income and voluntary corporate actions, creating major operational strain.
Meanwhile, over 60 per cent of brokers reported a decline in automation levels, directly contributing to rising error rates and higher costs.
Issuers aim to deliver accuracy and timeliness — but 53 per cent know that they are not enabling automation.
To further accelerate modernisation across the industry, the study found that over half of respondents view tech companies as a critical enabler of golden source data, underscoring their essential role in enabling asset servicing providers to grow and scale effectively and cost-effectively.
Client expectations remain the single largest driver of investment in asset servicing (38 per cent), followed by efforts to reduce errors (33 per cent) and meeting regulatory requirements (9 per cent).
While some firms expect to reduce asset servicing costs over the next five years, most firms are prioritising technology investments that enhance efficiency and profitability.
As firms seek to boost asset servicing profitability, the study says that they are decisively shifting investment towards technology — with many citing process re-engineering as the most effective area of change over the last five years and a critical driver of automation.
Mike Alexander, president of Broadridge Wealth Management, says: "Global asset servicing leaders are at a crossroads — transaction volumes and processing complexity are accelerating at a rapid pace, yet growth is constrained by legacy technology, increased risk and escalating data costs.
“As firms, traders, and investors demand increased real-time digital automation, and enhanced risk management, we see immense opportunity for firms to reimagine asset servicing through a single platform encompassing the entire asset service life cycle, leveraging AI, common data, and strategic outsourcing.
“The future of asset servicing depends on the industry's ability to increase real-time straight through processing, capture tax rules and efficiency upstream, and leverage common data with the client at the center."
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