It is no secret that digital transformation is currently one of the most important ways for companies to get ahead. But with tough economic conditions to contend with and more, Broadridge Financial Solutions finds out how business leaders view transformation in its latest study.
Broadridge’s ‘2023 Digital Transformation and Next-Gen Tech‘ study of 500 C-suite executives found that 60 per cent agree that blockchain and distributed ledger technology (DLT) will become the core of financial markets infrastructure within the next ten years.
Furthermore, 71 per cent said that artificial intelligence (AI) is already impacting the way they work. The expectation for technology to take precedence and understanding of how new tech, such as AI, can immediately impact working, appears to be reflected in company spending.
Firms now spend 27 per cent of their overall IT budget on digital transformation. This represents a 16 per cent increase when compared to Broadridge’s 2022 study. These figures may not come as a surprise, as 53 per cent of digital leaders saw higher revenue growth as one of the most important benefits of digital transformation.
Rising interest rates and a weakened economy have emerged as barriers to attracting and retaining talent. In the face of difficult times ahead for companies, 57 per cent of firms agreed that failing to keep up via digital transformation will hurt their ability to attract and retain talent.
Digital Transformation in Europe
Despite an apparent willingness to engage in digital transformation, the study found some of the biggest challenges making the goal more difficult. Thirty-nine per cent of European companies reported having an insufficient budget for innovation. Meanwhile, 37 per cent reported experiencing staff resistance to constant change. The third most prevalent challenge in Europe was the ongoing market and economic disruption (35 per cent).
For European firms, the study found that the biggest increases in technology firms in the next two years will go towards cybersecurity technology. With an average increase in spending of 29 per cent, this narrowly beat investment in cloud platforms and applications with an average increase of 28 per cent. Investment in data analysis and visualisation tools also appears to be a priority, with an average 26 per cent increase.
While 65 per cent of European firms believe blockchain and DLT are the future of financial services, only 60 per cent of US firms and 54 per cent of Asia Pacific firms agree.
It also appears that European firms are not as confident in the potential of the metaverse. Less than one-third (31 per cent) believe that the metaverse will become key for client interaction. This is less than 42 per cent of US firms and 43 per cent of Asia Pacific firms.
Over the next two years, firms plan to increase investment in the metaverse by only five per cent on average. Broadridge suggests that this stat may suggest a ‘wait and see’ approach before companies are willing to put money towards the technology.