The document discusses the results of a survey of 70 front-office banking executives on their five-year outlook. Regulation remains a top concern, with 81% believing it will impact their revenue models through increased compliance costs and reduced commissions. However, over the next five years, respondents believe disruptive technologies like fintech startups, automation, and cybersecurity will become increasingly important and supplant regulation as the main focus. Front offices are looking to market expansion and improving the customer experience to drive growth amid these changing industry trends.

1. INNOVATING THE
FRONT OFFICE
The Five-year Outlook
for Sell-side Banking
September 2016
Based on research by
FIS and Lantern Insights

2. TODAY

3. 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

4. WILL REGULATION CHANGE THE FRONT
OFFICE’S REVENUE MODEL?
SAY
YES
81%
46%
32%
22%
HOW?
INCREASED
COMPLIANCE COSTS
REDUCED
COMMISSIONS
NEW
REVENUE
MODELS

5. THERE ARE WORRIES ACROSS THE BOARD
Which area of regulation concerns you the most?
19% 19%
17%
13%
11% 11%
7%
3%
Data privacy Trade
transparency
Solvency and
liquidity
Tax Capital
requirements
Reporting Differences b/w
domestic &
global rules
Other

6. BUT…
REGULATION WON’T
ALWAYS BE TOP OF MIND

7. THE FIVE-YEAR
OUTLOOK

8. WHAT WILL SUPPLANT REGULATION?
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%
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)*
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

9. 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
TECHNOLOGIES
FOR COMPANIES
REGULATORY
COMPLIANCE
TALENT
MANAGEMENT

10. THE TECHNOLOGY-
DRIVEN BUSINESS

11. ARE BANKS BECOMING
TECHNOLOGY-DRIVEN BUSINESSES?
SAY YES
91%

12. WHY OR WHY NOT?
Skills and technology make the difference – not training or budget
IF YES IF NO
*Low Base: > 30
9%
44%
47%
We have an
ongoing
technology training
program
We have staff with
the latest skills
We have the latest
technology
17%
83%
Legacy
technology
Skills shortage
We have an
ongoing technology
training program
We have staff with
the latest skills
We have the
latest technology
Legacy technology
Skills shortage

13. THE PERSONAL IMPACT
How is technology changing your plans for the next 5 years within your business?
3%
4%
6%
21%
26%
29%
31%
31%
33%
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

14. WHAT DOES THIS
MEAN FOR YOU?

15. 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.

16. WHAT’S YOUR
FIVE-YEAR
OUTLOOK?