The days of silos inside capital markets technology vendors are numbered. Data and infrastructure providers are eying interoperability as they develop products and integrate acquisitions. Indeed, asset manager Natixis calls interop a buy-side necessity. Data giant Bloomberg, for example, is looking connect its buy-side order management and portfolio management systems. And Broadridge is working on front and back office interoperability.

Broadridge completed its acquisition of Swedish trading platform provider Itiviti in May 2021, and has rebranded it Broadridge Trading and Connectivity Solutions (BTCS). Broadridge CEO Tim Gokey tells WatersTechnology that the vendor wants to provide an ecosystem that allows clients to have a more rational infrastructure for trading and to optimize the front office. “We see more and more customers replacing their legacy vendor systems because of high maintenance costs, limited functionality, and lack of innovation,” Gokey says.

The vendor is utilizing API-driven architecture that combines both enterprise service and integration layers to allow applications to be called and deliver a result back. This framework is being implemented by re-architecting existing architecture. The enterprise service layer allows an API to cross domain boundaries while the integration layer allows for the flow of data across systems.

Broadridge will move its distributed architecture over the next couple of years into a private cloud it is building with IBM. In a distributed architecture, information processing is spread out among multiple computers, “It’s using a little bit of lift and shift to take distributed infrastructure and use next-generation virtualization to make it perform better,” Gokey says.

Vijay Mayadas, Broadridge’s president of capital markets, told WatersTechnology last year that the first priority was ensuring integration between the brokerage platforms and Itiviti’s platforms was as seamless as possible. In the last year, the company has worked on building a global market connectivity service, deepening its North American order management system (OMS) capabilities, and integrating its use of AI in automation and cross-product, cross-asset workflows for more efficient trading.

“BTCS’s platform consists of a suite of modular applications that can be deployed as a whole or as a cluster of standalone applications,” Gokey says. “This modularity allows for interoperability with other trading tools/systems via open APIs to best fit clients’ cross-asset trading needs and gives customers greater flexibility.” As an example, the Tbricks trading platform, which came via the Itiviti deal, allows for flexibility to add new ETF or fixed-income modules for more liquidity and automated execution services.

Looking forward, Gokey says the combination of front-office trade OEMS and Fix connectivity from BTCS could pair well with the provider’s existing post-trade product suite and capital market capabilities. “We’re a big back-office provider and when you connect the data from the back to the front, there’s a lot of unlock there,” he says.

Vinod Jain, a senior analyst at Aite-Novarica Group, says that because the middle and back office support the trading activities in the front office, having all three in the same solution allows for more seamless data flow. Data in the front and back offices may be using different sets of reference data or securities master data that could later need translating and cause trading breaks or failure.

Mayadas told WatersTechnology last year that there is demand for firms to take certain datasets and calculations out of the back office and into the front office to drive more a more real-time view of things such as risk, margin, settlement status, and so on. It can be more pertinent in asset classes traded highly electronically and algorithmically.

Front-to-back solutions can be difficult to pull off well and it can be hard to convince end-users in the back office to use front-office solutions from the same provider. Additionally, achieving front-to-back solutions through integration can be timely and not a sure success. Ion Group has had challenges integrating Fidessa. IBM wasn’t able to make its Algorithmics acquisition work in the long run.

“I don’t know whether a true front-to-back solution exists, because you will always be constantly innovating in some form or the other,” Jain says. He points to changes in asset classes around settlement—including possible movement to T+1 in equities—as an example of needing to innovate to adapt to market changes.

Broadridge is also looking to incorporate AI for corporate bond trading via its LTX platform, launched last summer as an automated trading solution. With client permission, Broadridge collects data through its fixed-income back-office platform to feed its AI models. This data powers a trading platform that Gokey says works in a similar fashion to Netflix. The streaming service suggests shows to viewers based on what they’ve already watched; LTX’s AI targets “natural” buyers and sellers for each security and gives respondents the opportunity to bid or offer their desired amounts through its proprietary, patented trading protocol, RFX, as an alternative to request-for-quote.

Last month, Broadridge announced a buy-side advisory group for LTX that includes senior credit traders from firms including AllianceBernstein, BlackRock, Pimco, and PineBridge Investments.

“There’s one part of this roadmap that is a horizontal integration where different asset classes and geographies can talk to each other but there’s also another part where there is front-to-back,” Gokey says.