Streambase 2012 FX Trading Technology survey


Streambase has just released their 2102 FX Trading Technology survey, an interesting read.

Key findings being:

FX algorithms for trade execution are on the rise and here to stay. With the rapid growth of electronic trading and proliferation of trading platforms, multi-bank trading platform providers have aggressively expanded their user bases while sell-side firms are concentrating on providing customized value-add services through banks’ electronic trading platforms.

Use of FX Algo 2012 Survey

2012 Survey above chart shows: Primary use of FX Algorithms by Buy and sellside firms

Below is the same chart from last years survey

Use of FX Algo 2011 Survey

2011 Survey above chart shows: Primary use of FX Algorithms by Buy and sell side firms
which we covered here Streambase 2011 FX Survey

Looking forward to 2013 auto-hedging and risk management capabilities are top of mind for technology improvement among both buy and sell side firms.

Key takeaways from the survey include the following:

    • A significant 17% increase in the usage of multi-bank platforms, and a 7% increase in the usage of single-bank platforms.
    • Participants seem to be more satisfied with the prices they receive from single-bank platforms
    • Top five multi-bank platforms used are Thomson Reuters, ICAP’s EBS, Hotspot, Currenex and Bloomberg.
    • Top five single-bank platforms used are Barclays Capital, Deutsche Bank, Citi, JPMorgan and UBS
    • Reducing latency, connecting to more venues, better relationships and algorithms are mentioned most frequently when participants were asked how they could secure better prices.

Both buy and sell sides believe that minimizing the market impact with the lowest implicit cost of execution is the most important criteria when it comes to best execution. However there is still a lack of generally accepted benchmarks.

  • In terms of satisfaction ratings, participants are most satisfied with their current liquidity aggregation systems and least satisfied with their current auto-hedging and risk management capabilities.
  • About 54% of sell-side firms plan to improve or add real-time liquidity management capabilities to optimize liquidity for customers and to mange risk more efficiently.
  • Regulatory requirements and the growth of emerging markets will continue to play significant roles in how sell-side firms manage their FX business.

Streambase Survey available here: 2012 Streambase FX Survey

2 Responses

  1. […] After a two-year break, during which Tibco acquired Streambase, it’s good to see that they are continuing the excellent FX Trading and Technology Trends survey, that Streambase published between 2010-12 (see here for 2011 and 2012 surveys). […]

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