Outsourced trading demand is increasing as investment firms look to reduce costs, satisfy regulatory demands & expand into different markets. For those offering, it is an opportunity to gain extra revenue leveraging their existing platforms. In this paper, we share why a growing number of firms are looking to use and provide outsourced trading as a service, the key trends emerging, market offerings and providers, and ten takeaways from Capco’s experts.
What is outsourced trading?
Outsourced trading (OT) is when a firm provides trading services e.g. trade execution, research, middle office activities, access to international markets to other firms, such as investment managers and hedge funds.
There are typically three main reasons why firms buy this service:
On the other side of the coin, selling outsourced trading as a service provides scalable revenue, allowing providers to leverage existing infrastructure and connectivity, and creates more opportunities for cross-selling, giving OTs the ability to sell other products parts of the firm to fund managers.
Outsourcing Trading: Who, What & Why Now? by Capco [PDF]