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The New Front-Office

Speaking with senior management at large buy- and sell-side firms makes it clear that the topic of digital transformation is, at last, being taken seriously. There is widespread acceptance in the industry that the race towards automation and digital acceleration is not about to stop any time soon. Exactly how this will manifest itself depends on who you speak with, but it is beyond debate that a profound transformation is underway, which calls for thoughtful planning and resolute action.

Previously, technology and systems were considered by many to be more of a back- and middle-office topic, with substantial IT spend going first towards booking / IBOR systems, risk management, market data and data management. The difference today is a growing recognition that the digital transformation will revolutionise the front-office too, across content generation, product design, portfolio management, sales and client support.

This creates a new digital imperative, one that requires new thinking as well as purpose. It has become vital to have a well-thought out front-office strategy, and a plan to execute it while accounting for existing processes and systems, the all-too-human reluctance to change, as well as market externalities.

The new front-office strategy needs to re-evaluate the functions, skills, processes and tools required to perform, serve clients and gain share in the digital age. A few firms such as JPMorgan and New York Life are showing leadership by letting Alexa be used respectively by institutional clients and internally to access specific information. This is barely scratching the surface of what is to come. Other industries, such as the car industry, have shown that hyper-automation may not be a solution, at least not immediately, but, surely, the status quo is not an option either.

The front-office will become an increasingly fused continuum of people and machines, smart tools that integrate with legacy systems, help humans focus on what they do best -- imagine, interact, engage with clients, find purpose -- while leaving to machines repetitive and computational tasks, such as turning data into insights, optimising models, predicting the likely performance range of new products, or shaping portfolios around the specific requirements of different clients.

What is at stake is not just achieving higher productivity and driving costs down. It is maintaining relevance, giving clients the level of performance and service they are craving for, and gaining share to 2020 and beyond - which the winners will achieve by re-thinking their business model, intelligently embracing technology, outsourcing where it makes sense, harnessing data to improve service, and mastering personalisation at scale.

The famous quote from Sir Winston Churchill comes to mind: “Sometimes doing your best is not good enough. Sometimes you must do what is required.”