Market-making and wider product reach power NBLP growth
Nonbank liquidity providers (NBLP) are continuing to deliver record trading volumes, intensify their competition as market makers with banks, and expand their reach across a wider range of products, observed Raman Kalra, Crisil Coalition Greenwich Head of NBLP Competitor Analytics in a Behind the Market Structure interview with the firm’s Head of Market Structure & Technology Research, Kevin McPartland.
The year that raised the bar
2025 proved to be a milestone year for NBLPs, with the total industry revenue pool crossing a record $110 billion. From a market structure perspective, usage of exchange-traded funds (ETFs) continued to rise, with retail participation in U.S. equity markets touching all-time highs. Simultaneously, digital assets across crypto and prediction markets kept growing, pointed out Kalra.
This reflects the broader sell-side performance, as elevated market volatility stemming from artificial intelligence (AI)-induced volatility, Liberation Day, and the impact of tariffs and geopolitical tensions contributed to strong global markets revenues across banks and NBLPs.
Equities was the outperforming asset class for the sell side, led by equity derivatives with “good participation from institutional and retail accounts.”
The fixed-income landscape was more mixed. Revenues were driven by macro products, be it rates or FX. “On the spread side, [it was] a more varied performance, especially in products like investment-grade credit, which has experienced margin compression as electronification continues to become a meaningful factor,” stated Kalra. Beyond volumes, positioning and risk management determine success for dealers in volatile markets, he pointed out.
Client market-making propels NBLP revenues
NBLP Competitor Analytics at Crisil Coalition Greenwich tracks NBLP revenues from a pure market-making or liquidity-provision perspective, based on its internal data on the sell-side landscape "through different environments and different client lenses.” Per this, pure market-making contributed roughly 30% of the total NBLP revenue pool in 2025.
However, NBLP participation in market-making goes beyond being “a pure revenue stream,” pointed out Kalra. “It's a way to broaden their horizons in trading different products across different venues and different regions.”
Private equity investments rise
Meanwhile, topline growth in 2025 was also supported by positive venture capital and private equity related mark-ups for specific NBLPs that are active.
To be sure, the NBLPs’ venture capital arms are not new. “But it definitely has been a good environment to be participating in that activity, with new opportunities arising in the software and technology space,” said Kalra.
Clients or competitors?
Are NBLPs clients or competitors of traditional banks? That depends on the product, according to Kalra.
For instance, NBLPs have emerged as meaningful competitors in flow products like flow rates and credit, as well as in cash equities and listed equity derivatives.
Kalra attributes this to a multitude of factors. “Whether it's the electronification of these asset classes, [say] the way the buy side is looking for liquidity through new channels, we are seeing NBLPs as more and more meaningful competitors in more product spaces.”
On the flip side, NBLPs remain clients of banks, namely in prime financing, for instance, and even for structured products and derivatives that they use for their own hedging purposes.
Advantage NBLPs
NBLPs have sustained their growth momentum in the first quarter of 2026, as geopolitical- and AI-induced volatility has continued to propel trading volumes.
Stated Kalra, “Volatility is a key metric that keeps providing a good environment for NBLPs to thrive. Similarly, we see electronification picking up in different product areas, and the continued expansion of the ETF ecosystem. That is really where we see the NBLPs having a good advantage.”