As asset managers make a big push into Money market funds, Ed Lopez, President, Global Money Market Services at Calastone discusses how this has created a new playing field for competition: the MMF portal and the access and experience it provides.
In a financial market that offers no shortage of twists and turns, ‘boring’ is booming. Money market funds (MMFs), once considered a somewhat staid corner of the market, are seeing not only a burst of investor interest, but a wave of innovation in structure, distribution and competition.
Assets under management (AUM) in rated MMFs surged to an all-time high of $7.2 trillion in the U.S. and another €2 trillion in AUM in Europe last year on the back of attractive yields from higher interest rates. For the first time in over a decade, MMFs offer a compelling alternative to traditional bank accounts for institutional investors, from large corporations to financial institutions, many of whom have spent their entire careers in a zero or negative interest rate world.
As asset managers make a big push into the sector, this has created a new playing field for competition – the MMF portal and the access and experience it provides.
The rise (and plateau) of independent portals
MMF portals emerged in the early 2000s, generally as single product, stand-alone systems delivering basic market discovery, trading and reporting capabilities. And in the beginning at least, these were mostly independent providers, many of which have now disappeared after years of consolidation.
Today, the landscape is split between banks providing their own portals to distribute their own funds, as well as third-party funds (Goldman Sachs, J.P. Morgan, Bank of New York, Morgan Stanley, BlackRock, HSBC), and the remaining large independent providers like FIS and Tradeweb/ICD.
The twin forces of consolidation and limited demand in the post-2008 low-interest rate era have had the predictable effect of slowing market development – bank platforms operated with captive audiences, while platforms catered to the stable audience of treasurers looking for surplus cash management.
Now, fresh interest in the sector is driving more innovation in the space, with BlackRock, Invesco and Charles Schwab launching money market ETFs and BlackRock also having launched a tokenized MMF. Increasing variety in the MMF options available requires a corresponding distribution network to access the range available.
The demand for a new portal experience
For MMF portals, access to the growing range of funds is key to acquisition.
This is especially the case for banks and broker-dealers; a way to capture more value by fundamentally changing their role in the MMF chain, moving from intermediating trades to owning the client access point itself. With positional leverage comes higher margin potential, acting as both a gatekeeper, controlling what the client sees, and a distributor, earning revenue from the fund managers.
This strategy allows providers to capitalize on their existing client flows, offering a new and valuable service that also serves as a fresh way to monetize those relationships. The portal here is key – integrating into a client’s daily workflow, firms can create a “sticky” and defensible technology infrastructure, making it harder for a competitor to dislodge the relationship.
MMF providers themselves need to grow assets, while brokers and other intermediaries want to control the client interface. A portal serves both purposes: it gives clients seamless, centralized access to liquidity and transparency, more important than ever since October 2024 SEC reforms to liquidity requirements, while giving the provider control over the distribution channel.
With elevated interest rates likely to endure, competition in the distribution landscape is here to stay.
Two paths to the market: traditional vs portal
There are two primary routes to the MMF market.
The traditional route involves distribution via large banks and platforms, where a corporate can choose to go directly to an asset manager to trade their funds. The alternative is the portal route, which is often more tailored, flexible, and can be white-labeled, while also providing better data, analytics, control, and end-investor reach.
There are money market fund managers that currently have no portal at all but are now looking to launch one. They recognize that if they had a portal, they could retain a client longer. Even if a client moves money out of their fund and into a competitor’s, a portal allows the original asset manager to retain a few basis points from that investment instead of losing the revenue entirely.
And for those institutions looking for broader ways of distributing their fund(s), listing on a competitor or independent portal can be the faster route to market, saving the cost of development and distribution.
The technology opportunity
Building modern portal infrastructure is a complex undertaking that requires the orchestration of data, fund connectivity, trading, and reporting.
The function and experience your portal provides requires a focus on infrastructure. Many existing portals are limited by a narrow view of the necessary functionality. While every portal allows users to trade, that capability is no longer a differentiator. To attract users, a new portal must offer more advanced capabilities.
Consider treasury management. Many corporates are stuck in a “swivel chair” workflow, where they place a trade in one system, move to another to log it in their treasury management system, and then swivel again to their banking system to move the money.
A truly integrated portal eliminates this by combining key functionalities beyond trading, including automated settlement, cash sweep capabilities, and direct connectivity to a corporate’s treasury management system.
As MMFs become a more popular tool for managing cash, portals will have to deliver on these ancillary benefits.
Winning the MMF race
After decades of a stable status quo, more corporates and providers are opening up to the wider possibilities of MMF products. And they are doing so in a financial market that has increasingly embraced integration, flexibility and product innovation. MMF portals are the key to offering all three elements, from value-add workflows to new products.
With the market increasingly facing outward, providers and intermediaries should make sure their portal is looking in the right direction.
First published The Global Treasurer August 2025: https://www.theglobaltreasurer.com/2025/08/29/money-market-portals-the-new-battleground-for-distribution/
