Donna Bristow

Chief Product Officer, North American Wealth & ICS Canada

The rise of the robo-advisor has been much discussed and well-documented for the better part of the past 10 years. Using Google Trends as a key indicator, the conversation peaked in 2021. But 2023’s AI hype showed everyone — wealth advisors included — that the possibilities for GenAI will feel endless, and they’ll only get better with time. Many advisors have already been on this journey, leveraging predictive analytics tools, but 2023 showed us we’ve finally reached a tipping point for these technologies.

As advisors have more access to these tools, the relationship between advisor and investor will only become more critical, and it’ll need to deepen. The best advisors will begin offering advice on more than just a portfolio, but also an individual’s financial picture holistically, whether that’s budgeting, buying a house, or many of life’s other financial decisions.

Following this trend, advisors will become part life coach, armed with an array of data, augmented insights generated by AI tools, and the ever-changing mandate to continue solving problems for their clients.

Roger Burkhardt

Chief Technology Officer, Capital Markets and AI

Microsoft cemented itself as the desktop leader in the 1990s, largely by building a developer ecosystem. In the 2000s, Apple became the dominant player in the smartphone space (and revolutionized personal computing along the way), bolstered by the launch of its App Store, on top of which a generation of tech giants like Uber, Airbnb, and DoorDash were created.

In 2024, the intense competition in the AI space will move from the battle of the large language models (LLMs) to the battle of the ecosystems. The broad availability of powerful LLMs will be available in software as a service (SaaS) and open-source formats. The winners of the ecosystem battles will compete on the value they contribute around the model with holistic solutions and a strong ecosystem that includes partners, domain-specific data, and online training programs.

OpenAI is already heading in this direction with its first developer conference, which prompted emergency hackathons by developers and showed a sign of what’s to come. Its largest investor and partner Microsoft will again play a leading role in the ecosystem battle, taking advantage of its strong position with Office365. Despite OpenAI’s dominance in headlines and culture, the battle is far from over. The combination of established digital giants with well-funded AI startups will make for a noisy year ahead as we move past the hype cycle into the battle for the ecosystem.

Dan Cwenar

President, Investor Communication Solutions Data and Analytics

If you only read the financial news headlines, you might expect the next class of investors to be purely focused on speculative investments, fixated on emerging technology stocks, and have no desire to speak with a human financial advisor.

Our findings, based on a dataset of tens of millions of investor households and supplemented with extensive investor and advisor research, show that the next wave of investors might surprise you. Sixty percent of millennial investors say they are likely to use an advisor in the next two years, and they are broadly investing in a relatively balanced mix of mutual funds, equities, and ETFs. New investors are coming into the market from every generation level, education level, and market segment that we track. Although this new wave of democratization may still represent a small percentage of overall assets under management, it is growing and represents the future. The long-awaited generational wealth transfer will unfold over the coming years, but it has begun.

What does this all mean for the financial ecosystem? This next wave of investors is already here — particularly younger generations and those with fewer assets — which means firms who ignore them now do so at their peril. The opportunities to engage and connect with them are many, driven by new technologies, more financial products, and more data to power personalization and education. We are just putting the finishing touches on our next report tracking these seismic shifts, but the trends are undeniable and there’s no turning back.

Robert Krugman

Chief Digital Officer

Up until November 2022, one could argue that blockchain and AI were in a similar place in our world. Both held great promise for future applications, were popular buzzwords on the conference circuit, and had been through extensive though somewhat under-the-radar research and development phases.

As 2023 became the year of AI and the crypto winter took up most of the rest of the tech press coverage, a quieter revolution was taking place. Digital trailblazers have been creating a fresh new wave of products and services that use blockchain-powered distributed ledger technology, particularly in banking and more recently capital markets. What will make blockchain more mainstream in 2024, however, is the value it creates when combined with AI.

The world of finance today is riddled with inefficiencies of all shapes and sizes. This includes settlements, cross-border transactions, latency, low transparency, as well as fraud and identity challenges. All of this will be disrupted by the integration of blockchain and AI, and has the potential to dramatically transform the middle and back office in the process. In the meantime, it’ll also dramatically reduce costs, make it easier for people to participate in the financial system, and even help to introduce new types of assets.

This all amounts to a reimagining of financial services not just for the next year, but also the next 100 years.

Matt Swain

Head of Communications Insight & Experience

In 2024, more companies will invest in transformative digital experiences. Historically, digital transformation has been fueled by operational efficiency and cost savings. This is the year we’ll start to see many more thoughtful, technology-driven customer experiences. Our clients are focused on delivering additional value to their customers and finding that sweet spot of reducing costs while improving experiences.

The “statement ready” notification process is a good example of a touchpoint ripe for disruption. Typically, these communications have historically been plain-text emails that provide minimal context and burden the recipient with a painful journey to find the document in their secure portal — if they can remember their password. In 2024, we will see more companies address this pain point by delivering engaging, personalized digital journeys.

We are helping clients improve these notifications by providing context for the content of the document within an enhanced email where the recipient can directly link to a microsite: a secure, interactive, and dynamic experience where they can open and collapse content, take relevant actions based on their contextual experiences, as well as explore additional information.

Horacio Barakat

Head of Digital Innovation for Capital Markets, GM of DLT Repo Platform

The broad use and acceptance of digital cash transactions to facilitate payment and exchange of value, as opposed to decentralized cryptocurrencies, is one of the most important and anticipated developments for 2024.

Significant progress has been made on the tokenization of non-cash assets like securities and physical assets, increasing collateral velocity for several asset classes, including Treasuries. The difference of course is that digital cash is far more complicated because it touches on economic policy, liquidity, and monetary policy. We are starting to see several types of digital cash come of age. Central Bank Digital Currencies (CBDCs) will fundamentally change not just financial markets but also the way we exchange value between institutions. Just look at the progress being made by many Central Banks around the world.

The other positive development that I see gaining traction in 2024 is the growing use of deposit tokens. These tokens are mostly created by commercial banks and other financial institutions, which can support a variety of use cases such as domestic and cross-border payments, trading, and settlement.

The combination of tokenized securities and digital cash will pave the way for true digital DVP, transforming the capital markets industry.

Cathy Conlon

Head of Corporate Issuer Strategy and Product Management

BlackRock’s Larry Fink made waves in June 2023 when he announced that he no longer uses the term environmental, social, and corporate governance (ESG) because of how politicized it had become,² the latest turning point in the incredible backlash against a widely used but poorly understood term.

Although Fink swore off the term, BlackRock’s actual stance on ESG issues remained largely unchanged. Last year may have seen a sharp drop in responsible investment inflows,³ there are still a few important underlying trends that are hard to deny.

For instance, the EU’s climate disclosure regulations are already strong. In the U.S., as all eyes will be on the Securities Exchange Commission’s (SEC) long-anticipated disclosure rule. California — the world’s fifth largest economy — just passed its own set of sweeping climate disclosure laws,⁴ which on their own could have a large impact on both companies and their investors.

Good governance won’t go out of fashion in 2024 either: just look toward the OpenAI boardroom struggle in November of 2023.⁵ As an industry, we will begin to use other terms than ESG, such as responsible investing, sustainable finance, and climate disclosures, and will continue to be more specific on ESG issues.

Despite getting a rebrand, the underlying focus on ESG issues won’t be going anywhere.

Danielle Gurrieri

Vice President, Head of Bank, Broker Dealer Product

In 2024, individual investors will have more influence than ever before due in part to the advent of pass-through voting.

Pass-through voting gives investors an opportunity to provide input to an asset manager on how they should vote on the equities that make up funds. The asset manager still has the ultimate vote, but they’re increasingly voting according to the retail investor's preferences. This democratization of the voting process for the end investor has been a huge focus for asset managers.

A key driver for this democratization has been increased regulatory pressure to provide opportunities for additional investor engagement and transparency. Another major trend driving demand is the prevalence of ESG. In the U.S. in particular, there are strong polarized views on voting for or against these ballot items. Investors are saying, “I want to have input. I want to vote on what is important to me.”

It’s not just the individual investor that is demanding more influence on the voting process. Institutions, such as pension plans, that have large shares in these pooled investment vehicles also want a bigger say.

Corporations are taking notice of this new trend and are interested in what they can do to engage investors and get their message across.

Ray Tierney

President, Broadridge Trading and Connectivity Solutions

In 2024, we will see the beginning of a fundamental transformation of capital markets. It begins with the integration of digital technology into all areas of business, massively changing how organizations operate and deliver value to their clients.

The shift that’s happening already is the acceleration of data and analytics automation and AI-assisted technologies. Firms want better multi-asset order and execution capabilities while maintaining regulatory compliance. They want to optimize the execution process in real-time to lower trading costs and improve revenue, profitability, and performance. These organizations are working on inserting more data, analytics, and automation into all aspects of their operations to optimize the execution process. This is across fixed-income, equities, FX, and all the listed asset classes that have the characteristics of equities.

Clients are simply not going to work with providers that are not investing in digital transformation. Nobody wants to deal in analog anymore. They want digital solutions to their problems. In the next three to five years, integration of digital technology into every aspect of business operations will be table stakes. Firms that are unwilling to put money into doing that will lose clients.