The Five-Year Outlook for Sell-side Banking

1. The Five-Year Outlook
for Sell-side Banking
September 2016
Based on research by
FIS and Lantern Insights
THE NEW
MIDDLE OFFICE

2. REGULATION
AND THE
MIDDLE OFFICE

3. DATA PRIVACY IS THE BIGGEST
WORRY FOR THE MIDDLE OFFICE
All data is sourced from July 2016 survey of 173 middle-office executives by FIS and Lantern Insights
Which area of regulation concerns you the most?
34%
14%
13% 13%
9% 9%
6% 2%
Data privacy Trade
transparency
Capital
requirements
Differences b/w
domestic and
global rules
Reporting Tax Solvency and
liquidity
Other

4. THE MIDDLE OFFICE IS ALSO WORRIED ABOUT
THE OVERALL IMPACT OF REGULATION
83%
17%
Do you expect regulation
to significantly change
your revenue model?
76%
24%
Do you expect increased regulation
to severely impact your business
in the next 24 months?
YES
NO
YES
NO

5. HOW WILL REGULATION IMPACT
BANKS’ REVENUE MODEL?
21%
25%
54%
INCREASED
COMPLIANCE
COSTS
REDUCED
COMMISSIONS
NEW
REVENUE
MODELS

6. WHAT DOES THE
FUTURE HOLD?

7. MOST IMPORTANT FUTURE TRENDS
FOR THE MIDDLE OFFICE
49%
42%
37%
32%
29%
29%
29%
24%
19%
33%
31%
37%
48%
26%
31%
26%
24%
34%
18%
27%
26%
19%
45%
41%
44%
53%
48%
Cybersecurity
Fintech start-ups
Automation
Mobile services
Blockchain
Outsourcing
Regulatory compliance
Execution algorithms
Multi-asset technology
Which of the following trends do you think will be most
important to your sell-side business over the next five years?

8. BUDGET PRIORITIES REFLECT
THE CHANGING TRENDS
Middle Office (n=173)
Only 12 percent say regulatory compliance will
get the biggest increase in investment by 2020.
34%
20% 20%
14%
12%
Market expansion Customer experience Disruptive technologies
or companies
Talent management Regulatory compliance

9. THE ROLE OF
TECHNOLOGY

10. IS YOUR BANK BECOMING A
TECHNOLOGY DRIVEN BUSINESS?
SAY YES
88%

11. TECHNOLOGY PLAYS A ROLE, BUT
SKILLS ARE THE BIGGEST OBSTACLE
IF YES IF NO
21%
26%
53%
We have an ongoing
technology training
program
We have staff with the
latest skills
We have the latest
technology
10%
20%
25%
45%
Other
Budget constraints
Legacy technology
Skills shortage
We have an
ongoing technology
training program
We have staff with
the latest skills
We have the
latest technology

12. WHAT’S NEXT FOR THE MIDDLE OFFICE?
1%
9%
14%
17%
27%
29%
39%
42%
53%
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 worried about new competitors
I'm expecting to change roles more often
I'm automating repetitive tasks
I'm starting to use new sources of data
I'm learning how to use new technology
Middle Office (n=173)
How is technology changing your plans for the next five years within your business?

13. But by 2020, I’m likely to
invest in market expansion
or disruptive technologies or
companies – not regulation.
Regulation will have a
significant impact on my
revenue model.
I’m especially concerned
about data privacy.
My role is changing too as
I learn new skills, use new
sources of data and
automate repetitive tasks.

14. HOW
IS YOUR EXPERIENCE
OF THE MIDDLE
OFFICE CHANGING?