Trade Republic increasingly a bank: internalised securities custody and settlement
German neo-broker expands business with in-house securities process management. After the launch of the card, an offer devoted to full banking services
of P. Sol.
2' min read
2' min read
Trade Republic expands its service as a bank by inaugurating in-house securities settlement and custody management. As of June 2024, the German fintech specialising in wealth management will be able to offer its four million customers in Europe all custody services, such as corporate transactions and dividends, thanks to an infrastructure built in-house over two years.
Trade Republic recently announced that it has reached four million customers, 1.5 million of which are outside Germany, and EUR 35 billion in assets under management, with fully passive management and the possibility to subscribe to monthly Etf-pacs. But customers can also buy individual shares in a fractional manner, starting with minimum shares. The expansion to banking services was enriched earlier this year with the offer of a card enriched with a 'Saveback' service that automatically sets aside 1% of the amounts paid to be allocated to an accumulation plan of one's choice.
Until now, the settlement of securities, i.e. the formal process from the initiation of a transaction to the transfer and payment of securities, was handled by HSBC's HTNG branch as intermediary custodian bank. With its new custody infrastructure, Trade Republic connects directly to the Clearstream central securities depository. Since the beginning of the year, securities purchases from new customers have increasingly been processed directly by Trade Republic. The migration of the existing customer base of several million customers was completed in one weekend.
Henceforth, clients throughout Europe will benefit from simpler processes and new products, which fintech will be able to develop faster and without dependence on partners. "Building a securities custody system in-house to control the entire broker value chain is an important step towards no longer being dependent on external partners and developing new products for our clients more quickly. We will especially benefit from this in the localisation of our products in Europe,' says Christian Hecker, co-founder of Trade Republic. 'We will be the first broker in Europe to simplify tax management in major European markets.
