Securities Business in Transition: Why Automation, Integration and Modularity Determine Competitiveness

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The securities business in the DACH region is undergoing a phase of profound change. While the technological foundations are now largely established, competition is shifting increasingly away from individual product features towards structural capabilities: integration speed, depth of automation and modular service architectures are becoming the decisive differentiating factors.

A recent, anonymised “Provider Survey on Service Design in the Securities Business” shows that market success is determined not only by whether new functions are offered, but by how they are implemented and embedded into end-to-end processes.

Methodological background

This article is based on an anonymised, qualitative provider survey on service design in the securities business in the DACH region. The survey and its analysis followed an end-to-end reference process “Investing” (see Figure 1), which structures all interview responses along identical process steps as well as standardised criteria in the areas of offering, processes and technology. The aim was to identify recurring patterns and implications, not to evaluate individual providers.

Figure 1: Generic securities process “Investing” and investment instruments / services

A solid foundation – but with varying characteristics

Overall, the surveyed market participants have a solid and largely comparable technological foundation. Core functions of securities processing are established, minimum regulatory requirements are met, and interfaces via API or FIX are widely available. The differences appear less at the level of individual system components than in the depth of automation, the quality of integration and the degree of modularity. While some providers rely heavily on decoupled architectures and standardised services, others are more strongly shaped by historically grown structures and project-specific solutions. This makes it clear that basic technological capability has become a hygiene factor. Competitive advantages arise where providers structure their value creation so that new services can be integrated quickly, securely and scalably.

Automation: present, but rarely end-to-end

A central finding of the survey concerns process automation. While many individual process steps are automated – particularly in the back office – end-to-end processing is only rarely achieved. Manual intervention arises above all in exceptional cases: incomplete data, regulatory warnings, special constellations in savings plans. In many organisations, these exceptions are still handled manually, which quickly becomes a scaling problem as transaction volumes rise. What matters, therefore, is not only the “happy path” but explicitly designed exception handling: clear rules, structured work queues and unambiguous responsibilities. Only when deviations are also processed systematically can automation realise its full effect.

Integration determines speed

Interfaces are standard today, but their usability is not. The survey clearly shows that actual integration capability varies considerably. While some providers have consistent interface logic, clean documentation and stable integration patterns, others require individual adjustments and project-specific custom solutions. The consequence: integration time and operating effort vary considerably, even though technically similar foundations are in place. This makes integration a strategic capability. APIs must not merely exist but be conceived as a product – with a clearly defined scope of services, stable data models and reliable operating processes. Only in this way can partners be connected quickly and new services scaled efficiently.

National embedding meets international scaling

A further pattern concerns the division of labour along the value chain. Customer-facing brokerage – particularly front ends – is increasingly scaling across borders. Processing, settlement and reporting, by contrast, remain strongly shaped by national regulatory and market-practice conditions. This constellation opens up new cooperation models but presents providers with the challenge of combining international scaling with local compliance. Target models must therefore take both into account: flexible front ends and robust, country-specific back-office structures.

Breadth of offering needs structure

In the area of offering & innovation, a broad, marketable service portfolio is evident. Equities, funds, ETFs, savings plans and fractionals are widespread, as are numerous additional functions. The real differentiation potential lies less in the number of features than in their structuring. As the breadth of offering grows, so does complexity – unless services are organised as a modular toolkit. Standardised building blocks, clear interfaces and defined variation points facilitate extensions and reduce dependencies. Among young, digitally minded target groups in particular, small-scale investment logics are gaining importance: savings and payout plans, fractionals or round-ups. These use cases increase transaction volumes and place high demands on automation and scalability.

Pricing, innovation and technology as enablers

Pricing and fee models also present a differentiated picture. Transparency and flexibility are usually given, but comparability in a B2B context is limited. As internationalisation increases, so does the need for consistent, configurable pricing logic. Fee engines thus become an important enabler for control and scaling. In the area of innovation, many new approaches are visible, though often implemented only selectively. Architecture and data standards largely determine the speed of new developments. Decoupled services, open ecosystems and API-first approaches significantly increase the pace of innovation. Artificial intelligence acts as an additional lever here – for example in regulatory matters or in context-sensitive customer interaction.

Orientation instead of trade-offs

The survey reveals a discernible division: digital pioneers set standards in automation and interface openness, while traditional providers score above all on stability, governance and established operating models. Both logics mark valid but different starting points for further development. These characteristics should be understood less as opposites than as axes of orientation along which institutions shape their target models:

  • Standardisation vs. individualisation
  • Stability vs. implementation speed
  • National embedding vs. international scaling
  • In-house delivery vs. orchestration of partners

Deliberate positioning along these axes shapes architecture, operations and competitiveness.

Four guidelines for further development

Four pragmatic guidelines can be derived from the results:

  • Establish modular architecture: Reusable services, clear data models and defined variation points create scalability and reduce complexity.
  • Operationalise automation: Measurable STP rates, structured exception handling and event-driven processing are central control levers.
  • Anchor compliance by design: Regulatory requirements should be integrated systemically and operationalised as machine-readable rules.
  • Think of partner integration as a product capability: Standardised APIs, transparent SLA orchestration and well-governed onboarding processes determine integration speed.

Conclusion

The securities business is technologically mature – and precisely for that reason, competition is shifting. Differentiation no longer arises primarily through new products, but through the ability to integrate services quickly, securely and repeatably into existing value chains. The next stage of innovation lies in situational investment services that can be embedded contextually into everyday financial life – scalable, compliant and efficient. For providers, this means a clear prioritisation: away from selective feature packages, towards an industrialised integration and automation capability.

Note: If you are interested in further insights or a professional exchange, we would be pleased to hear from you.

Simon Dummel
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