Covid-19 has forced companies to evolve with the times, particularly for the finance industry. According to a survey by the World Economic Forum, management, business and finance sector workers have the highest level of telework access in the US, with almost a quarter of all workers now operating from their homes as of March 2020. With previously sceptical employers increasingly coming to grips with the need to implement flexible working arrangements, demand for online access solutions have begun to increase. 

“Providing a seamless interface between regular office and remote business operations has become mission-critical to keep the financial circuitry of the world functioning,” says David Becker, APAC CEO of NYSE-listed FinTech firm Broadridge. He reports that an increasing number of banks in the Asia Pacific are looking for business continuity plans (BCPs) and work-from-home (WFH) solutions to ensure that their businesses can continue during lockdowns. In the “new normal”, such policies are no longer just “a nice to have”. 

According to Becker, demand has increased for improving the overall efficiency of workflow and support systems due to the pandemic. Of the firms surveyed in Broadridge’s Pulse Survey, 32% placed increased emphasis on a FinTech service provider’s ability to support business continuity, failover and redundancy procedures, and 31% emphasised on the ability of the FinTech firm to provide a continuous service without outages. 

Such a development has meant booming business for Broadridge. A self-described FinTech “grown-up”, it provides what it calls the “ABCD” range of cutting-edge services — AI, blockchain, cloud computing and digital transformation — required by modern businesses in the digital economy. As the global economy buckled under the strain of the pandemic, Broadridge enjoyed a strong 3QFY20 with a 9% rise in recurring revenues and a 5% increase in adjusted earnings per share despite lower event-driven activity and a proxy timing shift. 

Even amid fears of a second wave of Covid-19, Broadridge sees signs of further growth. According to Becker, demand for digital solutions was initially driven by urgency to bring about WFH policies in compliance with government regulations across the region, with most APAC countries more or less willing and able to get these new solutions on board. 

Ironically, however, stereotypically hightech Japan went against the grain. A survey by Japan’s Ministry of Land, Infrastructure, Transport and Tourism found that only 13% of Japanese workers were able to work from home, with 70% facing difficulty doing so, though Becker observes that the crisis has made Japanese business leaders more amenable to adopting BCPs. 

As trading volume rose amid heightened market volatility, the demand for better infrastructure has grown. For instance, market volatility in Tokyo reached 2–3 times of average levels, further driving up demand for FinTech solutions. “While no market has suffered a critical breakdown, banks and asset managers now want assurance that their technology infrastructure has the flexibility and resilience to handle the change in trading levels,” says Becker. 

Playing the long game 
As the crisis enters its fifth month, firms are increasingly looking to purchase innovative technology such as Broadridge’s “ABCD products” with a view towards developing longterm solutions to surviving a post-Covid business environment. 

At a basic level, firms have been looking to use technology to reduce operating costs as cash flow comes under pressure from the Covid-19 economic fallout. Finance firms have also been looking to optimise front- and back-end operations that may have been hastily implemented when workers fled to the safety of their homes. 

According to Becker, Broadridge’s ABCDs of innovation are used by four banks in Asia to transform their post-trade processing capabilities. The transformation leveraged machine learning and robotic process automation to process more data with greater speed and accuracy, flexible hybrid cloud to replace legacy systems in creating a single operating model and digital capabilities to add impact and efficiency to analytics and reporting. 

One of Broadridge’s successes was its role in developing a dynamic cloud-based offering for Hong Kong-based broker Planetree Solutions, which planned to expand into new asset classes and markets for future growth. Using this cloud technology, Broadridge provided a consolidated multi-asset solution which increased efficiency with the highest straight-through-processing (STP) automation. In Singapore, Broadridge also leveraged its own multi-asset class platform to assist a leading bank in delivering a global post-trade management solution. Apart from improved efficiency, it resulted in streamlined operations, reduced operational risk and a consistent user experience enterprise-wide. 

But Becker believes that firms should take an even longer-term view beyond just preparing for crises. They should tap into technology to introduce greater operational flexibility and business resilience. Such systems cannot be built overnight, he remarks in a LinkedIn article, nor should their use be seen as purely limited to dealing with specific crises that erupt from time to time. There are even competitive advantages for firms who make flexibility and resilience a cornerstone of their operations even without a global pandemic hanging over them like the sword of Damocles. 

Now, with all businesses in the same boat against an uncanny and invisible enemy, the traditional dictum that business is all about competition has become increasingly challenged as industry firms all face losses from the invisible enemy. There is now an increasing belief that firms must cooperate with one another to find solutions to common problems faced by the industry as a whole. “Greater collaboration will help find shared solutions that can be mutualised across the industry,” notes Becker. He encourages firms to form strategic partnerships with trusted companies to collaborate on solutions for the emerging “new normal”. 

Touching the future 
Becker believes that the nature of the Covid-19 recovery and the acceleration of digitalisation bodes well for Broadridge’s prospects. With recovery likely to resemble a more gradual U-shape or L-shape curve rather than a more immediate V-shaped curve, it is likely that remote working — at least for brief periods of time — will be necessary for firms to continue working in the immediate future. This will accelerate demand for FinTech solutions as the need for such equipment to sustain operations through this extraordinary period will grow ever more pressing. 

“Prior to the outbreak of Covid-19, there was already an increasing trend of technology adoption in Asia,” Becker observes. Broadridge’s Pulse Survey found that 60% of respondents in APAC said they were planning or have already begun implementing blockchain-based technologies. Asset managers who were able to successfully maintain business continuity could better serve their customers in new ways through digital means even before the pandemic. 

As an established FinTech “grown-up”, the Covid-19 pandemic gives Broadridge a ripe opportunity to build up market share. With cash flow pressure hitting many young FinTech start-ups — especially due to greater caution on the part of venture capital players — there are opportunities for larger players like Broadridge to gain market share from smaller players and strengthen its capabilities via merger and acquisition. While FinTech M&A were down in March owing to Covid-19 market volatility, consultancy firm EY is encouraging larger firms like Broadridge to strategically pursue M&A to strengthen their firms and revamp their business strategy. 

Becker tells The Edge Singapore that firms will heed his advice to develop stronger BCPs for a future crisis of this nature. The sheer economic impact of Covid-19 has clearly highlighted that it is too costly for firms to go unprepared should a similar crisis take place again. Naturally, this will see more demand for Broadridge’s products going forward as firms begin to fine-tune their remote working and FinTech frameworks further as the fire-fighting mode of crisis response gives way to long-term planning in the post-Covid period.

Yet, he sees a more drastic change on the horizon — a shift away from traditional offices to full-time remote working. A survey of CFO and financial leaders by Gartner has found that three out of four intend to shift at least 5% of their currently on-site workforce to permanent remote work arrangements post-Covid-19, with established investment banks Morgan Stanley and JPMorgan Chase already extending WFH options as of May. Internet giant Google is extending its WFH policy to June 2021. Facebook, meanwhile, has confirmed a permanent shift to remote work. This perhaps signals that at least a few financial institutions are thinking about following suit. 

Becker expects at least 25% of financial industry workers to trade their fancy offices on Shenton Way for the comfort of their homes, with 50-50 arrangements likely to be the norm at least until the pandemic can be neutralised. New technologies, naturally, will be required to optimise collaboration by staff across these different workplace settings and improve client engagement despite the move away from a brick-and-mortar office. Should this catch on in the Asia-Pacific economies, Broadridge could well experience greater long-run volume and demand stability from clients as they allocate more expenditure to maintaining remote working infrastructure. 

While there has been some debate over whether the office-centric culture of Asian workplaces could return to the pre-Covid status quo, some more forward-looking CEOs have hinted that they are at least seriously mulling over retaining certain WFH arrangements post-Covid. “Ninety percent of people could safely work from home and do it over extended periods of time. I think that’s what going to be the game-changer, and that shift will lead to a lot more flexible working arrangements,” DBS Bank CEO Piyush Gupta tells finews.asia, hinting that Singapore’s largest bank might spearhead a more lasting embrace of remote working in the country. 

“The role of technology will continue to grow, as digital operations, cloud computing and virtual meetings become more prevalent. As the world moves slowly into recovery mode, such changes will inevitably redefine what ‘business as usual’ means going forward,” Becker concludes in his LinkedIn article. A strong and well-established firm in the FinTech industry, Broadridge stands well-poised to capitalise on the emerging opportunities of this new normal.