Brokerage leadership will hinge on specialization

Brokerage leadership will hinge on specialization

최초입력 2025.05.26 13:46:44

Kim Seung-yeon, CEO of Next Securities

Citadel Securities LLC may not be the most familiar brokerage to retail investors, but it is often described as an “invisible hand” that plays a critical role in the U.S. stock market.
Why is this relatively lesser-known company, compared to names like Robinhood, E*TRADE, or Charles Schwab, considered a major player?
Citadel Securities is renowned for its use of high-frequency trading (HFT) techniques.
HFT is a form of algorithmic trading that places a large number of orders within very short timeframes.
Citadel Securities executes about 40 percent of U.S. retail transactions and plays a vital role in providing liquidity to the market through its HFT strategies.
Companies like this are referred to as “market makers.”
Also known as liquidity providers, market makers maintain both bid and ask quotes in the market and seek opportunities within that spread.
To do so effectively, they must possess significant capital. In this capacity, they function as a kind of “back-end” mechanism that enables the market to operate efficiently.
Their technological edge is not merely about server speed or system management but rests on a sophisticated infrastructure built on real-time risk analysis and revenue model optimization.
In South Korea’s financial investment landscape, large full-service brokerages have pursued the status of mega investment banks in an effort to build a Korean version of Goldman Sachs.
However, little attention or capital has been directed toward smaller brokerages, resulting in a widening gap between large and mid-sized firms.
Not every domestic securities firm can or should become a mega investment bank, but it is worth noting that global players such as Citadel Securities, Jane Street Capital, and Goldman Sachs continue to generate substantial operating profits.
Each global securities firm has its own competitive advantage.
Robinhood has positioned itself around democratized investing for retail clients. Charles Schwab has built its strength in asset management. Citadel Securities leads through its HFT capabilities.
These firms thrive by focusing on specialized areas that align with their strategic strengths.
The core competitiveness of a securities firm ultimately depends on how effectively it leverages its specialization.
With technological strength on a global scale, firms can elevate and refine their role as intermediaries in the capital markets, going beyond basic brokerage services. This is the foundation of the global brokerage business.
As the age of artificial intelligence (AI) unfolds, global securities firms are facing yet another strategic inflection point.
Although the future direction is uncertain, the technology-driven brokerage market is still in its early stages.
In this new era where platforms, data, and AI converge to enhance market access, execution efficiency, and personalized information, those who lead in technology will define the next chapter of the industry.
Structural innovation in capital markets will begin with technology-oriented firms, and securities companies can no longer afford to remain simple intermediaries. While not every firm will become a Korean Goldman Sachs, each can pursue its own path built on strategic focus and technological innovation.
As the technology-driven global brokerage market takes shape, attention should be given to how firms like Next Securities may contribute, in its own way, to this broader transformation.
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Brokerage leadership will hinge on specialization

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