Background Information

Steubing AG, one of Germany’s most experienced and financially robust securities trading banks, has been active in capital markets since 1987. Located in Frankfurt, the company currently employs 54 people, and its equity capital currently stands at  EUR 25 million.

Steubing clients receive access to professional market making, execution services and best execution across a wide range of asset classes, including equities, bonds, ETFs, structured products, derivatives, FX and more. The firm operates on all German stock exchanges and has access to 63 international stock exchanges and trading centers, making it a reliable partner for institutional clients in the areas of outsourcing, order execution, order routing, regulation and digitization.

Challenges and Goals

In 2016, Steubing learned that its trading platform vendor was in the process of decommissioning its product, a move that would saddle the bank with static functionality. While initially disappointed, Steubing quickly realized that this was an opportunity to reimagine its approach to technology, particularly around low-touch trading.

Steubing’s business encompassed both high- and low-touch trading, as well as both agency and proprietary trading – but it was the low-touch business that was in the greatest need of modernization. With its outgoing vendor, functionality was essentially limited to routing orders from Point A to Point B – there was no dashboard with supporting functionality, such as enhanced order monitoring. Steubing was not notified on the status of orders and address rejections in a timely fashion. Instead, the bank was sometimes notified of these rejections by its client, forcing manual outreach to the relevant counterparty, significantly slowing the process. And for non-equity asset classes, Steubing had no low-touch offering to speak of.

Beyond low-touch functionality, Steubing was eager to pursue additional efficiencies around connectivity and other aspects of the trade lifecycle. With that, the firm identified a need for not just a technology provider, but a strategic partner with the ability to not only drive a wide range of efficiencies but also respond swiftly to changes in the industry. With those criteria in mind, Steubing embarked on an extensive search process for its new platform provider.

Strategy and Selection

Steubing identified Broadridge Trading and Connectivity Solutions (formerly Itiviti) as a vendor capable of meeting its needs in terms of low-touch functionality, connectivity and flexibility. The firm evaluated several different solution providers based in Germany but realized that a local presence was not mission-critical – it simply needed the best platform on the market to accelerate the electronification of its workflows.

In addition to handling Steubing’s relatively straightforward high-touch trading, Broadridge’s low-touch OMS was able to support a wide range of highly complex, targeted low-touch workflows. Platform functionality included advanced direct market access (DMA), queuing, sophisticated pre-trade risk controls and robust search capabilities. Traders gained the ability to move orders from one venue or strategy to another in a single click, as well as set up real-time alerts and manage exceptions with ease, greatly streamlining processes.

These benefits extended across asset classes. For instance, the Broadridge OMS offered an electronic interface for fixed income trading, adding low touching trading to Steubing’s product portfolio. Overall, the platform offered the ability to modify routing rules per asset class and adapt over time, making it an ideal choice to prepare for an increasingly multi-asset future.

Broadridge’s approach to the FIX protocol was another key factor in the selection process. While each of Steubing’s clients had its own unique requirements and would send inbound orders in a different FIX format, the Broadridge platform is able to normalize these disparate instructions into a standardized format. In addition, the NYFIX order routing network from Broadridge offered global access to every relevant broker in the world through a single connection, enabling Steubing to transact with a massive network with maximum efficiency.

Beyond the functionality itself, the expertise of the Broadridge team stood out as a particularly strong fit. In addition to managing order flow, each of Steubing’s traders possesses a high degree of technical expertise and an understanding of smart order routing. The advanced routing capabilities delivered by Broadridge, along with the ability to look under the hood and understand exactly what went into routing decisions, created the ultimate combination, enabling Steubing to both deliver results and justify those results through in-house expertise, as well as quickly address any problems that may arise.

Once the selection was made, implementation proceeded. The process was marked by a high level of collaboration and communication, with the highly knowledgeable Broadridge team remaining involved throughout. While there was one obstacle toward the end of the process concerning the implementation of market data, both sides showed a high level of motivation and solved the problem with minimal delay.

Steubing now has a robust, fully functional system for high-and low-touch trading and market connectivity that promises to fuel innovation and increase client satisfaction.

Business Benefits

Since the start of its relationship with Broadridge, Steubing has experienced significant growth and success. Revenue has increased substantially, making it one of the largest order routing enterprise in Germany. In addition, Steubing can now sell itself to clients as a true electronic trading firm, something it could not have done with its previous provider. The scalability offered by Broadridge means Steubing can bring on new clients and increase order flow with minimal additional cost.

While Broadridge offers a suite of powerful out-of-the-box trading tools, it is the flexibility of its modular technology that has really driven results for Steubing. Broadridge provides the source code for each of its solutions, meaning that Steubing’s traders and developers can adapt the system for their precise needs by augmenting it with proprietary functionality. This is key to winning clients and prospects, who are more attuned than ever to how firms like Steubing claim to differentiate themselves from the competition.

Today, Steubing works closely with Broadridge’s customer success and support teams to brainstorm ideas, build new functionality, keep one another posted on roadmaps and the like. Every new addition is purpose-built for Steubing’s business, giving it a far more sophisticated offering than others in the market. In addition, the Broadridge team is constantly working on its own solutions to meet the industry’s needs, such as post-trade processing via FIX, giving Steubing the confidence that the partnership will endure through any set of circumstances.

“Steubing’s work with Broadridge has been a mutually beneficial collaboration in every sense,” said Moritz Tobien, Head of Integrated Orderflow Management. “We are a consummate consumer of Broadridge’s front-office products. With their technology, we are able to meet our clients’ needs with unprecedented efficiency and push the boundaries of product development, and our business has grown accordingly.”

Looking ahead, Steubing is well-positioned to weather future regulatory burdens and the threat of falling commission rates, as its OMS and connectivity are endlessly scalable. The bank is also working to create new rules to further streamline trading, as well as exploring how Broadridge’s recent acquisition of Itiviti could lead to further vendor consolidation and workflow efficiencies across the trade lifecycle.