Waters Rankings 2023: Best outsourcing service provider—Northern Trust

Product/service: Northern Trust Integrated Trading Solutions (ITS)


Northern Trust’s outsourced trading capability combines worldwide trading expertise in equities and fixed income, exchange-traded derivatives, futures, and exchange-traded funds (ETFs) across global markets. It provides coverage from multiple trading locations, access to high-quality liquidity and an integrated middle- and back-office service. The Integrated Trading Solutions platform helps asset owners and asset managers to lower costs, reduce risk, manage regulatory compliance, and enhance transparency and operational efficiency.

“Partnering with Northern Trust to outsource our trading operations has allowed us to quickly grow our business. We have gained access to asset class and markets expertise without having to scale an internal trading infrastructure, which allows us to focus on enhancing the product mix and investment insights we offer to our clients.”
Leland Clemons, founder, BondBloxx

The solution

Northern Trust’s ITS assumes the cost and complexity of trading-related activities, delivering these as a service on a variable cost basis, allowing firms to operate in a capital-lite, agile, and focused manner. ITS provides straight-through processing (STP) architecture that integrates data flows through front-, middle- and back-office systems, reducing the need for manual intervention and creating operational efficiencies.

Secret sauce

Today, asset managers are looking to outsource the entire trade lifecycle, including execution, trade matching and settlement, commission management and transaction-cost analysis (TCA), all of which can be delivered through the ITS platform. Northern Trust’s trading clients can also benefit from FX services through Complete FX, which automatically executes FX transactions at a time designated by the client.

Recent milestones

Northern Trust currently has more than 90 ITS clients across the globe, including in the US, the UK, the Netherlands, Switzerland, Australia, New Zealand and Asia. The firm’s ITS business has more than doubled over the past three years, with 22 new clients added in 2022, as increasing numbers of asset managers and asset owners choose the platform for their outsourced trading needs.

“The growth of our Integrated Trading Solutions business is a testament to our team’s dedication to helping Northern Trust Capital Markets clients solve their challenges across the trading spectrum. Achieving alpha is more difficult than ever before, and by outsourcing their trading function, clients can focus on investment decisions that deliver meaningful results.”
Glenn Poulter, global head of brokerage, Northern Trust

Future objectives

Northern Trust has partnered with Essentia Analytics to make additional analytics available to its ITS clients. Clients using Essentia’s service can sift out any hidden biases or tendencies when they route orders based on what-if scenario analysis and other behavioral analytics techniques. Additionally, Northern Trust continues to see interest in outsourcing parts of the investment process, as evidenced by its investment in Equity Data Science, a customizable research and idea-generation platform designed for fundamental investors.

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AFTAs 2023: All the winners and why they won

Here are the winners of the 30 categories in the 2023 American Financial Technology Awards. This year's multi-category winners are JP Morgan, Morgan Stanley, Goldman Sachs, Northern Trust and Wells Fargo.

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