innovating the front office
TRANSCRIPT
INNOVATING THE FRONT OFFICEThe Five-year Outlook for Sell-side Banking
September 2016
Based on research byFIS and Lantern Insights
TODAY
REGULATION REMAINS A KEY CONCERN
80%
20%
YES
NO
All data is sourced from July 2016 survey of 70 front-office executives by FIS and Lantern Insights
An overwhelming number of respondents believe increased regulation will severely impact their business in the next 24 months
WILL REGULATION CHANGE THE FRONT OFFICE’S REVENUE MODEL?
SAY
YES
81%46%
32%
22%
HOW?
INCREASED COMPLIANCE COSTS
REDUCED COMMISSIONS
NEW REVENUE MODELS
THERE ARE WORRIES ACROSS THE BOARDWhich area of regulation concerns you the most?
Data privacy Trade trans-
parency
Solvency and liquidity
Tax Capital re-quirements
Reporting Differences b/w domestic & global rules
Other
19% 19%17%
13%11% 11%
7%
3%
BUT…REGULATION WON’T
ALWAYS BE TOP OF MIND
THE FIVE-YEAR OUTLOOK
WHAT WILL SUPPLANT REGULATION?
Fintech start-ups (n=16)*
Automation (n=25)*
Outsourcing (n=31)
Cybersecurity (n=37)
Execution algorithms (n=25)*
Mobile services (n=32)
Regulatory compliance (n=11)*
Multi-asset technology (n=25)*
Blockchain (n=8)*
50%
48%
32%
32%
32%
31%
27%
24%
13%
13%
36%
48%
46%
20%
28%
18%
24%
63%
38%
16%
19%
22%
48%
41%
55%
52%
25%
Which of the following trends do you think will be most important to your sell-side business over the next five years?
1st Most Important 2nd Most Important 3rd Most Important
THE FRONT OFFICE IS ALSO FOCUSED ON GROWTH
33%
24%
19%
13%
10%
Market expansion will get the biggest increase in investment by 2020
MARKET EXPANSION
CUSTOMER EXPERIENCE
DISRUPTIVE TECHNOLOGIESFOR COMPANIES
REGULATORY COMPLIANCE
TALENT MANAGEMENT
THE TECHNOLOGY-DRIVEN BUSINESS
ARE BANKS BECOMING TECHNOLOGY-DRIVEN BUSINESSES?
SAY YES91%
WHY OR WHY NOT?Skills and technology make the difference – not training or budget
IF YES IF NO
*Low Base: > 30
We have an ongoing technology training program
We have staff with the latest skills
We have the latest technology
9%
44%
47%
Legacy tech-nology
Skills shortage
17%
83%
We have an ongoing
technology training program
We have staff with the latest skills
We have the latest technology
Legacy technology
Skills shortage
THE PERSONAL IMPACTHow is technology changing your plans for the next 5 years within your business?
None of the above
I'm expecting to work longer hours
I'm working with new departments or across silos
I'm having to do more myself
I'm automating repetitive tasks
I'm worried about new competitors
I'm expecting to change roles more often
I'm starting to use new sources of data
I'm learning how to use new technology
3%
4%
6%
21%
26%
29%
31%
31%
33%
WHAT DOES THIS MEAN FOR YOU?
Regulation - especially data privacy and trade
transparency - is still keeping me up at night. And it will
have a significant impact on my revenue model.
Technology will play an important role, whether I’m learning new skills or facing
new competitors.
I will invest in market expansion and the customer
experience to counter the effect of regulation on my bottom line and to be more competitive.
WHAT’S YOUR FIVE-YEAR
OUTLOOK?