CNBC, Anchor  00:03

Let's bring in Chris Perry, President of Broadridge Financial Solutions. He joins us now live Chris, good to see you. Appreciate your time. Welcome to the show. You are a fintech first off – Broadridge I mean. Were you all (at Broadridge) or any of your clients affected by this monstrous outage?

 Broadridge, Chris Perry  00:19

Mark, it's really great to be here with you. Frankly and fortunately, we were not affected by this. We're really an institutional offering. But this was really traumatic for many of my colleagues and many of our clients in other ways. It was an avoidable circumstance and a software patch that should have never gone through that process. And really, ultimately, it was a really big wake up call for everyone for our industry and for companies around the world.

 CNBC, Anchor  00:48

So for you, Chris, watching this happen in real time – luckily and thankfully, you weren't affected, and neither were your clients. What were the key takeaways or key learnings? I mean, it’s been about a week and a bit since but even just hours after it happened people were talking about risk of single point of failure and too much connectedness, etc… What about for you?

Broadridge, Chris Perry  01:08

Yeah, well, I'm in Tokyo today and glad to be here in Asia. But that morning, I woke up in New York at about 4am by a bunch of alerts that were happening. And again, the good news was none of our systems were affected by that. But this is a real trend that's happening and we've been engaged with our bank clients on resiliency around the world. The regulators get the joke, whether it's ESPA (Economic Security Promotion Act) in Japan or in Australia, Hong Kong, the EU – everyone realizes resiliency and security are super important. So, we're focused on that, we're working in partnership with the industry to make a safer industry in the world. Investors rely on that and that's what we're doing every day at Broadridge.

CNBC, Anchor  01:53

Chris, this disruption was caused by an erroneous software patch. And if this is just a glimpse of what could happen, then what's the risk if there is willful and deliberate sabotage by bad actors? What could happen then? And what is the workaround?

Broadridge, Chris Perry  02:15

Yeah, well, the risk is massive. I want to make sure people understand that because with democratisation of investments, with investors that are investing all over the world – we have shorter settlement cycles so the ability to recover is much more difficult. And you know, we have virtual workers all over working from places that are more difficult to make secure. So with all of that going on, Broadridge has partnered with a global bulge bracket bank, to ensure that we can deliver an immutability and repaid system that allows for us to, to basically have a data vault that secures information. And a lot of this is being driven by the European DORA Act, which is a resiliency action by the EU and the banks are aware of it. So we are looking to protect and be able to recover… So block, recover and be able to rebuild systems very, very quickly.

CNBC, Anchor  03:04

So to what degree is AI part of the solution here and unlike Superman it didn't come to the rescue of the global IT system when this erroneous software patch happened, but to what degree can AI mitigate or prevent these types of issues and disruptions happening on a broader scale?

Broadridge, Chris Perry  03:34

AI is a major part of solution. Look, let me just describe it. Broadridge does an annual digital transformation study of executives about 600 executives in financial services around the world and they said that they were to spend 28% more on cyber and about 67% more on A. I suspect that they need to spend even more on cyber because the cost of a violation is really high. But I really believe the combination of the spend on AI and the ability to have AI work as a defense mechanism in real time when all of your systems can be tested and recovered with AI bots. I think that's the opportunity that we're working on and working with industry to solve for.

CNBC, Anchor  04:20

And to your wheelhouse, Chris, as financial disintermediation continues at such a pace and momentum, how vulnerable is that particular sector to deliberate sabotage or disruption? And when we hear former President Trump talking about a Fort Knox, if you will for Bitcoin, is that sort of regulatory architecture a viable solution?

Broadridge, Chris Perry  05:02

Well, the DLT architecture is really strong with the way in which immutable records can protect the underlying ownership of assets. We’ve built a distributed ledger technology-based repurchase agreement platform we call DLT Repo. That's a great example of where we are protecting where the money is. And the robbers go where the money is, and banks are where the money is. And our DLT Repo platform is very specifically designed to lower the collateral obligations, capital requirements for banks, but also using the distributed ledger technology makes it a safer architecture technology. And we have to again, partner with the financial services industry, whether it's capital markets, asset management, wealth managers around the globe, to work together to make sure that the nefarious actors who have AI are not alone in the use of AI, making sure that we use AI. If nefarious actors are the only ones with AI, then we're all in trouble. So we have to embrace AI. I love the fact that there's massive spend happening in artificial intelligence across the industry. I believe, really, that is the answer.

CNBC, Anchor  06:09

Chris, we're gonna leave it there. It’s been a great conversation. Thank you very much indeed for joining us today with those insights. Chris Perry there, Broadridge Financial Solutions