Waters Rankings 2024: Best outsourcing service provider—Northern Trust

Overview

Northern Trust’s outsourced trading capability combines worldwide trading expertise in equities and fixed income, exchange-traded derivatives, 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 firm’s Integrated Trading Solutions (ITS) platform helps asset owners and asset managers to lower costs, reduce risk, manage regulatory compliance, and enhance transparency and operational efficiency.

The solution  

Northern Trust’s ITS assumes the cost and complexity of trading-related activities, delivering these to users as a service on a variable cost basis, allowing them 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 to support settlement cycles, 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), which can all be delivered through the ITS platform. Northern Trust’s trading clients can also benefit from FX services through Complete FX, the firm’s standalone foreign exchange trading service, which automatically executes FX transactions at a time designated by the client.

Recent milestones

• Northern Trust currently has more than 100 ITS clients globally, including in the US, the UK, the Netherlands, Switzerland, Australia, New Zealand and Asia.
• Northern Trust’s ITS business has more than doubled over the past three years, as increasing numbers of asset managers and asset owners choose the platform for their outsourced trading needs.

Future objectives

Northern Trust continues to expand its multi-asset trading capabilities to meet client demand. Equity outsourcing has been popular among managers for some time now, and the firm has noted a growing demand for its fixed-income outsourcing offering in recent months. It will launch a fixed-income trading desk in Asia-Pacific in late 2024 to provide 24/6 global coverage across asset classes and will continue to add counterparties to its multi-source liquidity network.