A 2020 VISION OF FUND ADMINISTRATIONARE YOU READY?

2016Longitude Research Survey and FIS Report Findings

The findings in this presentation, unless otherwise stated, are sourced from FIS’ 2016 commissioned research in partnership with Longitude Research and the resultant insight report, From Coal to Diamonds: 2020 Vision – The Future for Fund Administrators, April 2016

BY 2020,

BUT WHAT’S DRIVING INDUSTRY CHANGE?

THE FUND ADMINISTRATION LANDSCAPE COULD LOOK VERY DIFFERENT.

Predictors of change

3

Transitional point

in time

Technology is rapidly changing people’s expectations

External pressures from investors and regulators

are changing the landscape

The asset management community is shifting its

reliance to next-generation partnerships

Digitalization of processes and products is now a revolution rather than evolution

HOW DO WE KNOW?

57 global fund operations execsTop tier firms $10b+

Geographic focus: • Asia Pacific• Europe• North America • South Africa

TPAs

AMs with in-house capabilities

Investment banks that administer third-party funds

Service a diverse set of fund types

Part 1:Quantitative survey

5

33%

42%

21%

4%

0 10 20 30 40 50

Top tier / over $60 billion

Mid tier / $10 to $60 billion

Combination of top and mid tier

Less than $10 billion

51%

33%

16%

0%

0 10 20 30 40 50 60

Third-party fund administrator

Asset manager with in-house fundadministration

Bank-division that administersthird-party funds

Other, please specify

18%

18%

18%

16%

7%

5%

5%

5%

4%

0%

U.S.

U.K.

Luxemborg

Canada

Channel Islands

Australia

Hong Kong

Singapore

Ireland

Other

Asset manager with in-house fund administration

Bank-division that administers third-party funds

Part 2:Qualitative interviews

6

JACQUIE BUNGAYFund operations specialist, Investment Association

JOHN CAMPBELLHead of global services for U.K., Middle East and Africa, State Street

PETER CHERECWICHHead of global fund services, The Northern Trust

JEAN DEVAMBEZGlobal head of product and clients solutions, BNP Paribas

THERESA HAMACHERPresident, Versanture Consulting

Including:

JEREMY MAYManaging director, operations and client service, ALPS Fund Services

STEPHANIE MILLERHead of global fund services, JPMorgan Chase

AMIN RAJANChief executive, CREATE-Research

CHRIS SIMSChief technology officer, Ignis Asset Management

MIKE TUMILTYDirector of operations, Standard Life Investments

More than 15 one-on-one conversations with

leading asset managers, fund

servicers and other subject experts.

Change = challenge + opportunity

The challengeAdapt your operations to manage new pressures.

The opportunityAchieve differentiation and reinforce your market position.

The solutionTechnology holds the key to increasing your competitive edge.

The technology imperativeTo what extent do administrators anticipate having to adapt their systems, skills and processes by 2020?

Almost expect to have to make investments in new systems and technologies before 2020.

32%

30%

40%

49%

49%

49%

16%

16%

5%

4%

5%

5%

Processes

People and skills

Systems and technology

Significant change Moderate change Limited change No change

SO, WHAT’S THE BEST STRATEGY?

Join forces for the future of fund administration

Invest in the tools and capabilities that will empower your customers.

Transform a commoditized business model into a rich source of added value.

Elevate your role from service provider to partner in analytics.

High priority trends for investment:

Big data and analytics

Cloud computing technology

Mobile tools

Robo adviser technology

Increasing pressures are leading to value-added services

“What trends are most impactful leading into 2020?”

Keep up with regulation

Improve transparency

Reduced fees

Offer value-added services

Plus:

believe competition from another sector is likely and

expect that fees will fall by 2020.

But we’re not there yet.

13

have only basic data analysis tools.

offer no data analysis tools at all.

don’t have an integrated fund accounting and financial reporting platform supporting both traditional and alternative funds.*

can’t cater fully to multi-asset products.

*Source: Aite Group, Global Asset Management Study 2014, July, 2014

WHAT SHOULD BE YOUR NEXT MOVE?

Three steps to more productive partnerships

Are you ready? Watch this space – more details coming soon. In the meantime, read our full research report here.

Simplify complexity

Operate with scale

Respond to opportunity