NEW YORK, UNITED STATES – Asset owners are increasingly turning to outsourcing as costs, technology needs, and pressure to modernize pile up, according to Northern Trust executives.
In August, the North Dakota Retirement and Investment Office (NDRIO) became a prime example, outsourcing its trading to Northern Trust and its Integrated Trading Solutions (ITS) platform. Melanie Pickett, head of asset servicing for the Americas at Northern Trust, expects this trend to happen more often.
Scott Anderson, Chief Investment Officer of NDRIO, says the move will “enable the agency to operate with greater efficiency, reliability, and scalability as it brings more assets in-house.”
Why Outsourcing Is Gaining Ground
Outsourcing models that bundle software, operations, analytics, and access to private markets are increasingly appealing because they address capacity, complexity, and cost all at once.
Pickett explains that back when Northern Trust launched its front-office solutions platform ITS six years ago, some clients thought they’d only use software. Now, every single one of them uses their middle-office services too. That shift shows that tech alone isn’t just enough: asset owners need operational expertise to handle data, documents, and the workflow around investments.
She notes that asset owners are now under the same cost pressure that has long affected asset managers. They also face faster change: evolving target operating models, new expectations around AI, and global macroeconomic risks. And so, the market segments previously resistant to outsourcing middle-office work are now changing their minds.
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