This article written by George Rosenberger, Head of Managed FIX Services, Itiviti, was originally published in Global Trading magazine.

“The ability to choose an independent connectivity provider is the ultimate insurance policy.”

With the continued evolution of capital markets, market consolidation is the commonplace order. Smaller technology vendors are being acquired by larger vendors at an alarming rate. The latter are also expanding their offerings through mergers and acquisitions to reduce time-to-market for new solutions and features.

Over the course of the past 24 months, we have seen billions and billions of dollars change hands, not just from the mergers of tech companies, but financial firms recognizing the need to become more technology focused — I can think of eight off the top of my head. To fully comprehend the impact of consolidation in this space, let’s consider the main rationale behind it. I see three basic motives for growth through consolidation:

1. Increasing customer bases

Monolithic companies may acquire a firm for their customer relationships, rather than adding technology or resources.

2. Improving buying and negotiation power

Smaller firms struggle against larger firms with stronger negotiation power in RFQs; an acquisition allows the infrastructure to scale in order to land larger global clients.

3. Adding efficiencies and removing redundancy

Extreme cost cutting of systems and resources, staff reduction (involuntary or voluntary) and product end-of-life decisions can produce immediate budget gains.

  • How does vendor consolidation impact you and your clients?
  • Is your client connectivity managed by your OMS provider?
  • How confident are you that the risks to your and your clients during a migration have been addressed?

 

Read the full article by George Rosenberger to find more information on how to unbundle client connectivity from your OMS provider to protect your firm and your clients. 

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