EMPOWERING THE BACK OFFICEThe Five-year Outlook for Broker-dealers

Based on research byFIS and Lantern Insights

TODAY

REGULATION REMAINS A KEY CONCERN

35%

65%YES

NO

All data is sourced from July 2016 survey of 40 back-office executives by FIS and Lantern Insights

Two-thirds of respondents believe increased regulation will severely impact their business in the next 24 months

WILL REGULATION CHANGE THE BACK OFFICE’S REVENUE MODEL?

SAY

YES

65% 65%20%

15%

HOW?

INCREASED COMPLIANCE COSTS

REDUCED COMMISSIONS

NEW REVENUE MODELS

THERE ARE WORRIES ACROSS THE BOARDWhich area of regulation concerns you the most?

Data privacy Tax Trade trans-

parency

Capital re-quirements

Differences b/w domestic and global rules

Solvency and liquidity

Reporting Other

40%

23%

10%8% 8%

5% 5%3%

BUT …REGULATION WON’T

ALWAYS BE TOP OF MIND

THE FIVE-YEAR OUTLOOK

WHAT WILL SUPPLANT REGULATION?

Fintech start-ups

Automation

Outsourcing

Cybersecurity

Execution algorithms

Mobile services

Regulatory compliance

Multi-asset technology

Blockchain

14%

31%

36%

55%

20%

36%

30%

15%

33%

43%

44%

21%

27%

30%

36%

10%

46%

43%

25%

43%

18%

50%

28%

60%

38%

67%

Which of the following trends do you think will be most important to your business over the next five years?

1st most important 2nd most important 3rd most important

THE BACK OFFICE IS ALSO FOCUSED ON GROWTH

30%

25%

18%

15%

13%

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 BROKER-DEALERS BECOMING TECHNOLOGY-DRIVEN BUSINESSES?

SAY YES85%

WHY OR WHY NOT?Budget is the biggest constraint

IF YES IF NO

We have an ongoing technology training program

We have staff with the latest skills

We have the latest technology

30%

35%

35%

Budget constraints

Legacy technology

Skills shortage

17%

33%

50%

We have the latest technology

We have an ongoing technology training

program

We have staff with the latest skills

Legacy technology

Budget constraints

Skills shortage

THE PERSONAL IMPACTHow is technology changing your plans for the next five 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 worried about new competitors

I'm expecting to change roles more often

I'm starting to use new sources of data

I'm automating repetitive tasks

I'm learning how to use new technology

5%

8%

13%

20%

20%

20%

40%

43%

45%

WHAT DOES THIS MEAN FOR YOU?

Regulation – especially data privacy – 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 systems or automating tasks.

Budget is the biggest constraint on my firm’s ability

to become a technology-driven business.

WHAT’S YOUR FIVE-YEAR

OUTLOOK?