Broadridge (BR) Q2 2026: 72% GenAI Investment Acceleration Signals Digital Transformation Tipping Point
Broadridge’s 2025 industry study and panel reflect a financial sector at a digital inflection, with AI and data consolidation dominating transformation agendas and operational resilience now a non-negotiable. GenAI adoption, regulatory-driven tech upgrades, and distributed ledger investment are converging to redraw competitive boundaries. Execution risk remains high as legacy systems, regulatory ambiguity, and cyber threats challenge the pace and scale of change.
Summary
- GenAI Investment Surges: Financial firms are rapidly scaling GenAI initiatives, with 72% making moderate to large investments.
- Data Unification Now Mission Critical: Single-source data strategies are viewed as the core enabler for transformation and compliance.
- Resilience and Cybersecurity Dominate Agendas: Operational and cyber resilience are now foundational, not optional, for industry leaders.
Performance Analysis
Broadridge’s 2025 Digital Transformation and Next-Gen Technology study reveals a sector-wide shift toward accelerated digital adoption, with over 500 C-level and senior executives across 11 global segments affirming that legacy technology, fragmented data, and regulatory pressure are the main obstacles to transformation. More than 40% of firms believe their digital strategies are lagging the pace required by market and regulatory realities.
GenAI (generative artificial intelligence) investment has leapt from 40% to 72% of firms year-over-year, with quantifiable productivity gains already visible in call centers, document processing, and predictive analytics. Data unification and governance have emerged as the single most desired capability, with firms citing single-source-of-truth data architectures as the linchpin for enabling AI, regulatory compliance, and customer experience.
- Legacy Tech Bottleneck: Nearly half of firms cite outdated systems as the primary limit on resilience and transformation velocity.
- Regulatory-Driven Modernization: Compliance deadlines (e.g., T+1 settlement) are being leveraged as catalysts to fund and accelerate automation and modernization.
- DLT and Crypto Investment Rises: 71% of firms are now investing in distributed ledger technology (DLT), with 64% increasing crypto exposure as regulatory clarity improves.
Operational resilience and cybersecurity spending have become non-discretionary, with 90% of firms planning material increases in 2026. Third-party risk and cross-border regulatory complexity are cited as growing challenges, especially as firms migrate to cloud and external platforms.
Executive Commentary
"Data is the foundation of everything that we do here. We're only as good in our delivery mechanisms as our data enables us to be. Fixing and streamlining the pockets of data around any large organization is absolutely mission critical."
Mike Daugherty, Managing Director and Head of Product Operations, Morgan Stanley Wealth Management
"Firms need to understand their interdependencies with their vendors and their service providers. They need to understand how their firm would be impacted if the vendor had an outage and what their plan B is and test for that."
Steve Byron, Head of Ops Tech, Cyber and Business Continuity, SIFMA
Strategic Positioning
1. Data Consolidation as Strategic Core
Single-source-of-truth data infrastructure is now seen as the foundational enabler for both regulatory compliance and AI-driven transformation. Firms are prioritizing data governance, ownership clarity, and quality to break down silos and unify client views across business lines. This shift is directly tied to competitive differentiation in client experience and operational efficiency.
2. GenAI and Automation Drive Productivity
GenAI adoption is delivering measurable efficiency gains in customer service, document processing, and exception management. Examples include call summarization saving 30 seconds per call and AI-driven fail prediction and penalty cost modeling in trading operations. Firms are also exploring AI for code migration, reducing mainframe-to-cloud transition costs and time.
3. Regulatory Change as a Modernization Catalyst
Compliance deadlines (e.g., T+1 settlement cycles) are being used to fund and accelerate technology upgrades, with firms aligning automation projects to regulatory deliverables. Regulatory ambiguity, however, remains a challenge, as firms must budget and plan for mandates before final rules are published, increasing execution risk and resource strain.
4. Resilience and Cybersecurity as Table Stakes
Operational and cyber resilience have become foundational requirements, not optional enhancements. Third-party risk, legacy system vulnerabilities, and cross-border regulatory constraints are forcing firms to rethink architecture, disaster recovery, and vendor management strategies. Resilience-by-design is now embedded in all transformation initiatives.
5. DLT and Digital Asset Momentum
Distributed ledger technology (DLT) and tokenization are moving from experimentation to real-world use cases, especially in collateral management and private markets. Regulatory clarity, particularly around stablecoins and tokenized securities, is accelerating adoption, with industry pilots (e.g., Regulated Settlement Network) demonstrating operational viability and efficiency gains.
Key Considerations
This quarter’s study and panel discussion underline a market in transition, where digital transformation is both an offensive and defensive imperative. The convergence of AI, data, regulatory reform, and cyber risk is reshaping how firms allocate capital and prioritize projects.
Key Considerations:
- Data as Competitive Moat: Firms with unified, high-quality data architectures will outpace on AI, compliance, and client experience.
- Execution Bottlenecks Remain: Legacy systems and unclear regulatory timelines continue to slow transformation, especially for global and cross-border initiatives.
- Cyber and Third-Party Risk Escalate: As firms migrate to cloud and external vendors, resilience and vendor risk management become core competencies.
- DLT Adoption Tied to Regulatory Clarity: Real-world impact of distributed ledger technology hinges on stablecoin frameworks and tokenized asset rules.
Risks
Legacy technology and fragmented data remain the primary obstacles, slowing transformation and exposing firms to operational and cyber risk. Regulatory ambiguity, particularly around new settlement and digital asset rules, creates budgeting and execution challenges. Third-party dependencies and cross-jurisdictional data privacy constraints add further complexity as firms scale digital initiatives.
Forward Outlook
For Q3 2026, Broadridge and its industry peers expect:
- Continued acceleration in GenAI deployment, with focus shifting to intelligent document processing and agentic AI pilots.
- Increased investment in data consolidation and modernization, especially as new regulatory deadlines approach in Europe and the UK.
For full-year 2026, management and industry leaders anticipate:
- Material increases in cybersecurity and operational resilience budgets.
- Broader adoption of DLT and tokenized asset platforms as regulatory frameworks solidify.
Management highlighted that alignment between business and technology leadership, prioritization of high-impact projects, and resilience-by-design will determine transformation success amid ongoing uncertainty.
- GenAI and data unification will remain top priorities for capital allocation.
- Execution risk will persist until regulatory clarity and legacy tech overhaul accelerate.
Takeaways
Broadridge’s study signals a sector racing to close the digital gap, with clear winners and losers emerging based on data, AI, and resilience execution.
- GenAI and Data-Driven Firms Will Outperform: Early adopters are already extracting measurable productivity gains, setting a new bar for efficiency and client delivery.
- Resilience and Cybersecurity Are Non-Negotiable: Operational and third-party risk management are now central to transformation, not afterthoughts.
- Watch for Regulatory-Driven Tech Upgrades: Forthcoming settlement and digital asset rules will drive further modernization and create new industry leaders.
Conclusion
Broadridge’s Q2 2026 digital transformation pulse shows the financial sector at a crossroads, where data, AI, and resilience investments are separating leaders from laggards. Execution risk remains elevated, but those who align technology, operations, and regulation will define the next era.
Industry Read-Through
This quarter’s findings have broad implications across financial services. AI and data consolidation are no longer optional for banks, asset managers, and infrastructure providers seeking regulatory compliance and operational scale. Cyber and operational resilience are now board-level issues, with third-party risk and vendor management becoming core capabilities. DLT and tokenization are moving from hype to real-world adoption, but regulatory clarity will dictate the pace. Firms that fail to modernize data architecture and embed resilience will fall behind as the industry’s digital transformation accelerates.