Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Steneveek on Bloomberg Radio.
Speaker 2: Let's talk a little fintech here. The company, Yeah, the
Speaker 2: company today is broad Ridge. It's a public traded company.
Speaker 2: The tickers b are you put that into the Bloomberg terminal.
Speaker 2: The company's got twenty two point six billion dollars in
Speaker 2: market CAPAIN stock is up forty three percent year today.
Speaker 2: Joining us today, Tim Goki, chief executive officer of Broadridge.
Speaker 2: He joins us via zoom from New York City, and
Speaker 2: I know the company held today an investor day, so
Speaker 2: we'd like to hear what's going on there. Tim, Thanks
Speaker 2: for much for joining us here. Tell our listeners, our
Speaker 2: viewers just give us kind of the thirty second overview
Speaker 2: what you guys do at Broadridge.
Speaker 1: Yeah, absolutely, thank you. Paul a guest is really great
Speaker 1: to be with you today. So, as you said, we
Speaker 1: are a global fintech and we really sit at the
Speaker 1: intersection of financial services. We power the critical infrastructure that
Speaker 1: really supports perber governance in North America and around the
Speaker 1: WORL world, also capital markets and wealth management, and we're
Speaker 1: sort of the behind the scenes player that makes that
Speaker 1: possible for many of our clients, who are the largest banks,
Speaker 1: broken dealers, asset managers. We have a unique network that
Speaker 1: really connects all market participants, including all public companies through
Speaker 1: their broken dealers, to individual and institutional investors, enabling corporate governance,
Speaker 1: but also supporting capital markets and wealth management.
Speaker 3: Tim, as Paul mentioned, you did have an investor day today.
Speaker 3: Walk us through what you can discuss when it comes
Speaker 3: to some of the business strategies that you unveiled.
Speaker 1: Yeah, it was an exciting day, and I think we
Speaker 1: talked about that network I just described and how that
Speaker 1: has enabled us to build businesses over time. We talked
Speaker 1: about the consistent results that we've produced ten percent recurring
Speaker 1: revenue growth over the past ten years, fourteen percent TOM
Speaker 1: hundred and earnings growth over the last fourteen years, and
Speaker 1: why we think the next is going to be just
Speaker 1: as good based on some really significant trends and drivers
Speaker 1: that we're seeing in the market around the democratization of investing,
Speaker 1: the digitization communications, and the acceleration of trading, and those
Speaker 1: are all areas that we've positioned our company to enable.
Speaker 2: Tim describe kind of the services the products that you
Speaker 2: guys have at Broadbridge. I know you're in communications, you
Speaker 2: also clear trades. Just kind of let us know how
Speaker 2: you guys generate revenue.
Speaker 1: Yeah, a couple of different areas. So in corporate governance,
Speaker 1: we provide a twenty four x seven sixty five SaaS
Speaker 1: platform that takes in investor positions, reconciles them, sends the
Speaker 1: communications that public companies need to send to all of
Speaker 1: their investors for boards of directors elections, and then takes
Speaker 1: back and taglay the results of those, provides end to
Speaker 1: end vote confirmation, and then provides all of the building
Speaker 1: and sort of financials behind that, And so we're really
Speaker 1: behind the scenes player that facilitates all the boards of
Speaker 1: directors elections. We also facilitate many of the meetings themselves.
Speaker 1: Last year we did about twenty five hundred meetings virtually
Speaker 1: on our platform. And so whenever you get a communication
Speaker 1: from your broker dealer, either digitally or if you're stually
Speaker 1: getting it by mail, it's likely that it came through us.
Speaker 1: So that's a big part of our business. The other
Speaker 1: part of our business is providing technology platforms for capital
Speaker 1: markets firms and wealth management firms, and we really provide
Speaker 1: the underlying books and records, paying people their dividends, settling trades,
Speaker 1: clearing trades. So nothing that you would see as a consumer,
Speaker 1: but very important part of the infrastructure for many of
Speaker 1: the largest players.
Speaker 3: Talk to us about how your company is providing guidance
Speaker 3: when it comes to the democratization of investing.
Speaker 1: Yeah, and that's really you know, that is a multi
Speaker 1: decade trend where over time we've seen the cost of
Speaker 1: trading and participating in markets for individual investors continue to
Speaker 1: get lower, culminating in really zero commission trading, which we
Speaker 1: have seen now and also new products going all the
Speaker 1: way back to the invention of mutual funds and ETFs,
Speaker 1: but now managed accounts, direct indexing. All of that is
Speaker 1: drawing more participation, more people participating, and also them holding
Speaker 1: more individual positions, and we get paid per position because
Speaker 1: we're communicating with the old one share of Amazon or
Speaker 1: one hundred that's the position. The number of investors with
Speaker 1: the percentage of adult age US adults that are owned
Speaker 1: at least one share has gone from forty nine percent
Speaker 1: and years ago to fifty nine percent last year. So
Speaker 1: we're seeing increased participation also an increase in the number
Speaker 1: of products that people are holding and so that is
Speaker 1: really causing companies to want to engage with their retail
Speaker 1: shareholders more as causing a demand for new tools. That's
Speaker 1: why we are introducing a lot of digital tools to
Speaker 1: help wealth management firms facilitate that engagement with you with
Speaker 1: your clients.
Speaker 3: I'm glad you brought up tools because AI tools is
Speaker 3: in your notes. We've talked so much of Paulay about
Speaker 3: the AI frenzy here. Talk to us more about what
Speaker 3: that means when you're talking about AI tools as far
Speaker 3: as helping your products.
Speaker 1: Yeah, we are, and as is everyone. We're investing a
Speaker 1: lot in AI and we see it helping in a
Speaker 1: few different ways. So, first of all, you know, generative
Speaker 1: AI will just be part of every product in the future.
Speaker 1: It would be table stakes for most companies. And then
Speaker 1: beyond that, companies that have unique data, we'll be able
Speaker 1: to really create creative products that help and provide them
Speaker 1: in advantage. Earlier this year, we introduced a product called
Speaker 1: Bond GPT and it allows traders Capital markets traders to
Speaker 1: ask sophisticated questions about bonds, which ones are available, the structure,
Speaker 1: details about them, which would be available to look up
Speaker 1: and use your keyboard to consult different databases and find
Speaker 1: the information, but that takes time, and so we can
Speaker 1: take complex queries that might take even experienced trader many
Speaker 1: minutes to do, provide that back in seconds, and those
Speaker 1: kinds of pre trade analytics make the whole process easier
Speaker 1: for them. That's just one example. We're introducing generative AI
Speaker 1: really across our products.
Speaker 2: Hey, Tim, when I was on the street, we settled
Speaker 2: our trades T plus seven. Then it became T plus five.
Speaker 2: Now I think the kids are doing it at T
Speaker 2: plus one and maybe T plus zero. How does that
Speaker 2: impact your business? That's got to be a technology on nightmare.
Speaker 1: Yeah, it is. So we're currently the market is at
Speaker 1: T plus two and it is moving in May to
Speaker 1: T plus one, and so we are working with all
Speaker 1: of our clients on facilitating that change and helping them
Speaker 1: do that. There's a whole series of industry testing that's
Speaker 1: going on even as we speak, and I think that
Speaker 1: the limits of today's technology make T plus T plus
Speaker 1: one will be fine. The move T plus zero will
Speaker 1: be harder. People are beginning to talk about that. There's
Speaker 1: also a lot of behavior change that is required because
Speaker 1: one of the things that happens between today. Between T
Speaker 1: and T plus two is a lot of interchange between
Speaker 1: the person that made the trade and all the participants
Speaker 1: to confirm that it's actually the right trade and that
Speaker 1: gets allocated to the right account, and now all that
Speaker 1: will have to happen in sort of half the time.
Speaker 2: All right, Well, I was on the floor the New
Speaker 2: York Soca Change when to crash in eighty seven.
Speaker 1: Wow.
Speaker 2: We spent weeks trying to match tickets and it was
Speaker 2: a disaster. I can't imagine what Boy, we needed detech
Speaker 2: technology back then. Hey, Tim, thanks so much for joining us.
Speaker 2: Tim Gogie, chief executive officer Broadridge, a fintech company, joining
Speaker 2: us on Zoom from New York City. Yeah, it was
Speaker 2: a disaster. I can't remember the numbers, but typically we'd
Speaker 2: have mismatched trades. Call it ten thousand just at the
Speaker 2: end of the day at Paine Webber, you know, on
Speaker 2: that October day, and then for weeks afterwards, it was
Speaker 2: you know, if it wasn't ten thousand, it was three
Speaker 2: hundred thousand. I mean, it went crazy, So, I mean,
Speaker 2: and it was like that every firm across the street,
Speaker 2: and you'd spend days running around to Morgan, Stanley, Goldman
Speaker 2: sach trying to find the other ticket to match, Like,
Speaker 2: I know I bought three hundred thousand x on here,
Speaker 2: but I can't find it.
Speaker 3: Was that your first job coming out of college where
Speaker 3: we were.
Speaker 2: In a training program and they yanked all the trainees
Speaker 2: and they turned down to the stock is Chraine a
Speaker 2: couple days before that the day wow right, yeah, because
Speaker 2: vimees were just getting so big right in front of
Speaker 2: that that day and then it was just crazy, and
Speaker 2: you know, and then I think everybody turned around and said,
Speaker 2: I think we should probably think about investing in technology.
Speaker 2: You know, that might might be our friend. You know,
Speaker 2: Writing a blue ticket for a buy and a pink
Speaker 2: ticket for a seal is no way to run a
Speaker 2: business