An overwhelming number of front-office staff expect regulation to severely impact their business within two years; 76 percent think it will hit their revenues in a big way. Breaking the cycle of rising costs and falling margins will require brokers to innovate in their use of technology, process and partnerships. Capture the highlights of a study into the broker-dealer front office revealed in this slideshow, based on primary analysis from FIS and Lantern Research.

1. INNOVATING THE
FRONT OFFICE
The Five-year Outlook
for Broker-dealers
Based on research by
FIS and Lantern Insights

2. TODAY

3. REGULATION REMAINS
A KEY CONCERN
83%
17%
YES
NO
All data is sourced from July 2016 survey of 41 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
76%
29%
35%
35%
HOW?
INCREASED
COMPLIANCE COSTS
REDUCED
COMMISSIONSNEW
REVENUE
MODELS

5. THERE ARE WORRIES ACROSS THE BOARD
Which area of regulation concerns you the most?
29%
20%
15%
12% 12%
7% 3%
2%
Data privacy Trade
transparency
Capital
requirements
Solvency and
liquidity
Differences b/w
domestic &
global rules
Reporting Tax Other

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

7. THE FIVE-YEAR
OUTLOOK

8. WHAT WILL SUPPLANT REGULATION?
71%
31%
47%
25%
40%
37%
33%
33%
40%
29%
38%
40%
50%
42%
27%
40%
31%
13%
25%
60%
21%
67%
40%
20%
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
24%
22%
20%
17%
17%
Market expansion will
get the biggest increase
in investment by 2020.
DISRUPTIVE
TECHNOLOGIES
FOR COMPANIES
MARKET
EXPANSION
REGULATORY
COMPLIANCE
TALENT
MANAGEMENT
CUSTOMER
EXPERIENCE

10. THE TECHNOLOGY-
DRIVEN BUSINESS

11. ARE BROKERS BECOMING
TECHNOLOGY-DRIVEN BUSINESSES?
SAY YES
81%

12. WHY OR WHY NOT?
Skills and technology make the difference – not training or budget.
IF YES IF NO
2%
25%
31%
42%
Other
We have staff with
the latest skills
We have an
ongoing
technology training
program
We have the latest
technology
20%
20%
60%
Legacy
technology
Skills shortage
Budget
constraints
We have staff with
the latest skills
We have an
ongoing technology
training program
We have the
latest technology
Legacy technology
Budget constraints
Other
Skills shortage

13. THE PERSONAL IMPACT
How is technology changing your plans for the next five years within your
business?
2%
10%
12%
15%
20%
24%
39%
51%
51%
None of the above
I'm worried about new competitors
I'm expecting to work longer hours
I'm having to do more myself
I'm expecting to change roles more often
I'm working with new departments or across silos
I'm automating repetitive tasks
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 using
new sources of data.
I will invest in market
expansion and disruptive
technology to counter the effect
of regulation on my bottom line
and to be more competitive.

16. WHAT’S YOUR
FIVE-YEAR
OUTLOOK?