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Changing Trends in Forex - Technology-for-Capital-Markets
Brad J. Bailey, Research Director, Capital Markets, Celent


Brad J. Bailey, Research Director, Capital Markets, Celent
Major FX trading firms continue to grow their distribution directly via their client portals or single-dealer platforms and via a multitude of other distributions.
Investment banks continue to invest in their institutional portals, taking lessons in customer engagement from the retail side, and applying them to a holistic offering for clients. Within FX, this is execution of spot and products, hedging, PnL, trade management, and margin requirements. In certain cases, banks are expanding to the full suite of services rates, treasury, etc.
Global regulation and best conduct in FX have driven a desire for transparency, fuelling new data providers, compliance tools, analytics, and next-generation TCA.
MiFID II and MiFIR have required considerable remapping of where executions for spots and the products sit, as well as logistic changes. This is a sprint to the finish. Demand is higher than ever for cross-asset functionality when client firms are selecting FX technology.
Legal ramifications from past scandals have altered trading and communication in FX, which is one of the factors driving a new wave of tools such as secure messaging, compliance-friendly IM platforms, and voice capture systems, as well as investment in more sophisticated and third-generation surveillance.
Nonbank liquidity providers are increasing their interaction with flow across the market and continue to become a more substantial component of trading volume, across the platform landscape and point-to-point liquidity spaces.
Regional banks continue to leverage technology, in many cases via full service (i.e., white-label or broker in a box solutions) to protect and grow their market share amongst their buy-side and corporate clients.
Middle and back office operations are seeing considerable innovation from FinTech and incumbent FX provides as they look for paths to drive efficiency by increasing automation in FX operations, with cloud based delivery, or DLT solutions.
The FX market is becoming more technology and data focussed and this will continue as firms seek capital efficiency, best execution and operational excellence
See More: Top Capital Market Tech Solution Companies
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