Financial firms across the Asia-Pacific region are emerging as global leaders in digital transformation, outpacing peers in key areas, such as data management, artificial intelligence ( AI ) integration and digital asset adoption; yet, as the region scales its ambitions, obstacles – ranging from legacy systems to regulatory complexity – continue to temper momentum, according to a recent study.

Asia-Pacific firms demonstrate a clear lead in digital maturity across asset management, wealth management and capital markets, finds the fifth annual Digital Transformation & Next-Gen Technology Study by Broadridge Financial Solutions.

Compared with their global peers, the region excels in risk mitigation ( 56% in Asia-Pacific vs 41% globally ) and data-driven technology deployment in wealth management ( 43% vs 34% ). However, Asia-Pacific lags in core engineering capabilities, particularly in capital markets, where only 26% of firms report leadership, compared with 35% globally.

Asian firms are also investing more aggressively in blockchain, digital assets and AI than their global counterparts. This year, 79% of Asia-Pacific institutions are making major investments in distributed ledger technology ( DLT ), up sharply from 61% last year.

In addition, nearly three-quarters ( 72% ) of firms in the region are committing capital to cryptocurrencies, well above the 64% global average, according to the study.

Operational efficiency is a key driver, with 43% of Asia-Pacific firms believing digital assets can streamline processes, compared with just 33% globally. In addition, 58% expect widespread adoption of DLT in capital markets over the next several years, a forward-looking signal that the region is preparing its infrastructure for tokenized finance.

“With the right data strategy and a clear plan to address legacy tech,” says Chris Perry, Broadridge’s president, “firms can drive digital transformation, enable innovation at scale, enhance customer experiences and foster long-term growth, while providing operational resilience and efficiency.”

Headwinds

AI remains a core focus. Some 84% of Asia-Pacific firms are making moderate-to-large investments in AI, motivated by cost efficiency, productivity gains and client engagement.

While generative AI ( GenAI ) is still in its early phase of adoption, with nearly half of the region’s respondents ( 49% ) report pressure to implement GenAI tools, a figure notably higher than the global rate of 40%. Still, actual GenAI usage remains modest, used primarily for market research and investment analysis.

Yet, Asia-Pacific firms, despite their ambitions, face headwinds that are hindering transformation efforts. Regulatory constraints loom large with 43% of firms citing limits on customer data usage for AI-driven analytics.

Security concerns also persist with only 36% of regional respondents viewing blockchain as secure, and just 20% believing transactions are adequately regulated. Data security issues affect 39% of Asia-Pacific firms, with 28% saying they are planning substantial increases in cybersecurity spending.

Legacy technology remains another major stumbling block. Despite advances in digital communication tools, 57% of regional firms still rely on hardcopy formats, even when clients opt for paperless interactions. Over half of respondents ( 54% ) cite outdated systems and processes as barriers to delivering seamless customer experiences.

While Asia-Pacific’s financial sector is clearly ahead of the curve in many areas, its path to fully digital operations is not without complexity.

Balancing innovation with regulatory requirements and operational pressures, the Broadridge study argues, will be essential as firms push to consolidate the region’s leadership in next-gen financial technology.