Increased demand from the buy-side for one-stop shop trading systems has seen a wave of mergers and acquisitions among technology providers in the last 12 months.
Most recent of the wave of M&A deals was ION’s acquisition of DASH Financial Technologies earlier this month, in a bid to expand its execution method, analytics, workflow routing solutions, and regulatory technologies offering. The trading technology provider said the deal would help it better manage risk imposed by the pandemic, political uncertainty, and increasing levels of retail investment in the market.
Another notable recent deal was the $2.5 billion acquisition of trading technology provider Itiviti by Broadridge Financial Solutions in May earlier this year to bulk out its front-office and multi-asset class offering. Broadridge said at the time that the acquisition of Itiviti, which services clients across 50 countries, would greatly expand its capital markets offering and allow it to expand outside of North America using its growing footprint in EMEA and Asia Pacific.
Consolidation taking place in client markets, on the buy-side especially and on major trading venues, has set an example for the fintech trading systems space. In a market where size matters, the pooling of resources can greatly expand the reach and client base of a firm and this has encouraged firms to combine forces through mergers. This year also played host to the combination of TradingScreen and Imagine Software to create TS Imagine after the pair originally partnered in August to launch their front-to-back buy-side trading solution.
Andrew Morgan, chief revenue officer at the newly merged TS Imagine, told The TRADE: “Over the coming months, expect to see a greater drive for workflow simplification in front-office, particularly as institutional investors look to consolidate multiple execution and risk platforms into one integrated solution covering equity, derivatives, fixed income and FX trading needs.”
Previous major deals, such as State Street-Charles River ($2.6bn) and SS&C Technologies-Eze Software ($1.45bn), have set a precedent on size in the market and left firms with no choice but to bulk out to compete. The ongoing demand for simplified and streamlined end-to-end solutions is likely to snowball throughout the market in years to come with more mergers and acquisitions expected in the future.