Citco's latest Middle Office Solutions report covering activity in Q2 2025 has just been released, revealing the latest trends in middle office outsourcing.
Trade operations demand showed no sign of abating in Q2, with the number of trades up sharply year-on-year. Against a backdrop of volatility sparked by concerns about the “Liberation Day” tariff announcement, the latest data from the Citco group of companies’ (Citco) Middle Office Solutions team saw the number of trade matching trades rise 74% year-on-year.
Looking across the suite of Middle Office services, growth was also seen in treasury volumes, which rose again quarter-on-quarter and which were 17% higher year-on-year. Meanwhile, collateral trades were in-line with the previous quarter, as elevated activity in April dissipated in May and June.
Introduction
Trade operations demand showed no sign of abating in the second quarter of 2025, with the number of trades up sharply year-on-year.
Against a backdrop of volatility sparked by concerns about the “Liberation Day” tariff announcement, the latest data from the Citco group of companies’ (Citco) Middle Office Solutions team saw the number of trade matching trades rise 74% year-on-year.
April was a key driver of Q2 volumes as market volatility spilled into the second quarter, with the S&P 500 seeing the largest one day gain since October 2008 post the subsequent tariff pause announcement. Volumes then returned to pre-March levels in the final two months of Q2.
Looking across the suite of Middle Office services, growth was also seen in treasury volumes, which rose again quarter-on-quarter and which were 17% higher year-on-year.
Meanwhile, collateral trades were in-line with the previous quarter, as elevated activity in April dissipated in May and June.
In the current climate, it has never been as important to have a reliable, efficient middle office. More managers than ever before are using the Citco Middle Office Solutions’ team, tools, and outsourced solutions, to save time and money.
In-house teams should be looking to outsource key middle office functions to specialists that have the technology, scalability and expertise to rapidly identify issues and streamline processes to better handle increased activity.
Citco’s offering covers Treasury and Collateral Management, OTC settlements, and Trade Matching.
Whether you’re a manager, insurer, or corporate, we understand the challenges you face when it comes to effectively scaling your middle office, and we are here to help.
Our data insights
Citco’s Middle Office Solutions team has compiled data on overall trade volumes, values and collateral calls for Q2 2025.
Data on payments volumes and collateral moves are constituted by all dispatched payments including Letter of Acceptances. All data is drawn from clients using our proprietary systems, Æxeo® Collateral and Æxeo® Treasury. All transaction types are included from tax payments to loan funding, transaction costs, cash collateral and OTC settlements, among others. The underlying funds include all Hedge, Private Markets, Real Assets, Family Office and Institutional funds in our client base encompassing a significant proportion of Citco’s $2T+ in Assets Under Administration.
Treasury volumes and values
The value of transactions going through Citco’s Æxeo Treasury platform jumped 17% quarter on quarter in Q2, with April’s figure of $246bn of transactions a record monthly high, and June’s total coming in at $219bn.
On a yearly basis, it is a much-changed picture, with Q2’s overall transaction value of $649bn some 45% higher than the corresponding figure in 2024.
Meanwhile, treasury volumes rose 4% quarter-on-quarter to 170,080 after a succession of 55,000+ transaction months throughout the quarter.
Other areas of treasury services saw similar moves upwards; Invoice transactions rose 3%, while trade settlements and margin/broker transfers rose 4% each.
Overall, and notwithstanding the surge in transaction values, the figures reinforce the consistent, growing demand for outsourced middle office solutions that Citco has witnessed since we started compiling these reports.
Collateral calls
The value of collateral trades surged in April – even surpassing March’s elevated figure – as markets remained volatile.
While a decline in the latter months meant the overall value of margin movements was only 3% higher versus Q1, on a yearly basis Q2’s total was almost 40% higher.
Overall, collateral trade volumes were in-line with the previous quarter, at 23,448 versus 23,747 in Q1, while cash and securities collateral trades also maintained similar levels to the first three months of the year.
Citco’s Æxeo Treasury platform, which integrates seamlessly with Citco’s proprietary Æxeo Collateral and Invoice Management module, provides a completely end-to-end workflow for tracking collateral movements. Our collateral management tool is directly integrated into Swift via Æxeo Treasury so that once a collateral movement is agreed to, it flows to treasury for approval and then into Swift, all using straight through processing.
Trade operations
Citco saw a 39% jump quarter on quarter in listed trade matching in the second quarter as volatility jumped across both equity and bond markets.
In total there were 603,318 listed trades, well ahead of the previous quarter and 66% higher versus the same quarter last year.
The number of trades overall also surged once again, rising 25% to 943,705, as a repeat of Q1’s heightened levels of activity played out. Meanwhile, OTC trades rose 8% quarter-on-quarter, while equity swaps were flat.
Even as volumes surged overall, Citco’s infrastructure and follow the sun coverage meant the number of trades affirmed on was consistent with the previous quarters, at 97%.
How we can support and improve your Middle Office
Through regular contact with clients and prospects, Citco has been discussing the various issues that managers are facing in the middle office because of this challenging work environment.
- Legacy treasury management requires the use of physical tokens and separate usernames and passwords for all of a firm’s different banking portals. A company’s cash management can be severely hindered, with payments halting if any of these expire. Citco designed the cloud-based Æxeo Treasury platform with this in mind, and its functionality allows for streamlined, centralized access for approval of wires, removing the need for tokens, and providing clients with clarity on whether funds have been paid and received.
- In this time of heightened uncertainty, companies are unsurprisingly paying more attention to where they are exposed to counterparty risk; for example, are their internal teams on call and need to know if they have excess funds to pull from? This can be difficult to quickly assess, however Citco's Æxeo Collateral platform was designed with this issue in mind. It can provide companies’ treasury teams with this information instantly, along with daily management reporting for quick and timely decision-making. Citco also has a dedicated team for the timely and accurate management of counterparty exposure and daily calls which is ready to manage a significant increase in margin movement so that companies avoid being labelled as a credit risk.
- Increased trading volumes create the potential for reconciliation issues in the form of an increase in breaks. Citco's scalability means our team can handle increased volumes and break resolution directly to the street. Citco’s Æxeo® Trade Operations solution allows for the automation and streamlined matching of trading on T+0, resulting in a decrease in breaks on T+1. Citco can also help companies by providing daily-dedicated coverage to handle street-facing break resolution and timely settlement of OTC trades and related cash flows.
- Citco's collateral management tool is directly integrated into Swift via Æxeo Treasury. Once a collateral movement is agreed, it flows to treasury for approval and then into Swift – all STP.
In today's fast-paced world, outsourcing your middle office isn't just a trend - it's a necessity. We are seeing volumes climbing quarter after quarter as clients increasingly see the benefits of using third party technology and teams to provide a streamlined service which helps them scale more effectively. - Ryan Fitzgerald, Head of Middle Office Solutions, Citco Fund Services (USA) Inc.
Overview of Middle Office Solutions
Reduce costs, add scale and minimize operational risk by partnering with Citco and our proprietary technology.
Data Services
- Curated data accessed through a web portal with multiple pick up and delivery methods
- Enrich with client own or vendor data
- Run on-demand, self service scheduling and event based invocation
Treasury Management
- Facilitate cash movements on client’s behalf
- Initiate and maintain Swift connectivity with paying agents
- Maintain wire instructions
- Liaise with bank reps as required
- Invoice Management
OTC Settlements
- Settle your OTC payments
- Break resolution with counterparty
- Independent calculation of OTC cash flows
Trade Operations
- Confirmation and matching of trade details on T and T+1
- Break resolution
- Maintain interface connectivity to primary vendors
- Prime Broker Fails Monitoring
- Near real-time online trade status dashboard
Collateral Management
- Calculation of collateral on bi-lateral and cleared OTC derivatives
- Exposure and Independent Amount analysis
- Margin break resolution/escalation
- Tracking and settlement of monthly interest on posted and held collateral
- End to End Uncleared Margin Rules (UMR) solution including independent regulatory initial margin calculation
Citco Middle Office Solutions combine our teams’ subject matter expertise with leading proprietary technology to help reduce costs, add scale and ultimately minimize operational risks associated with missed control processes.
Middle Office Solutions is comprised of five areas:
- Treasury Management
- Collateral Management
- OTC Settlements
- Trade Operations
- Data Services
Our holistic offering aims to provide clients with:
- A scalable middle office
- Reduced cost structure
- Easy ‘plug and play’ offerings
- Best in class proprietary technology
- Headcount efficiency
