The USD6 trillion foreign exchange (FX) industry is in the midst of a tech revolution, with cloud computing and trading technology upgrades set to become the sector’s major disruptors in 2021 and beyond, according to new independent research commissioned by Integral, a provider of FX SaaS technology solutions and trading platforms.
With continued levels of uncertainty in today’s remote working environment, respondents in a survey of heads of FX trading and senior FX managers at financial institutions across Europe, North America, and Asia Pacific said that cloud will make significant headway over the course of the next five years. Findings showed that 28 per cent of respondents will operate their FX technology completely in the cloud within the next five years compared to the current figure of 2 per cent. Further, an additional 41 per cent will be using some combination of cloud and on-premise technology compared to 24 per cent at present.
Findings also indicate multi-dealer platforms will see the biggest rise in usage compared to other trading channels in the next 12 months. An increased emphasis on relationship trading has also pushed API trading into focus for many, with 33 per cent of respondents expecting this trading method to rise in popularity over the next 12 months. This interest in API trading underscores a trend toward institutions leveraging increased control over brand and distribution technology, while maintaining lower operational costs through outsourced FX technology. Respondents signalled the expected shift to cloud is driven by lower cost of technology, ease of integration, automation, ability to customise, and accessibility for distributed workforces.
Harpal Sandhu, CEO of Integral, says: “This past year has proven that the future of FX trading is highly dependent upon technology. It is no surprise that in the next five years cloud computing is projected to feature in the workflow of almost everyone surveyed. Looking ahead, we expect that the increased use of cloud will help market participants of all shapes and sizes perform their FX functions on a daily basis cheaper and more efficiently, and that time to market, customisation abilities and remote accessibility will continue to be necessary requirements of a sophisticated workflow.”