Build or buy, it’s all about differentiation


Early this morning, New York time, I and about 40 other people attended the panel “Evolving Platform Technology & New Markets” which was sponsored by Caplin as part of Profit & Loss’s Forex Network tradeshow in New York. As Jennifer mentioned recently, the panel consisted of Raj Iyer of BNY Mellon Global Markets, Thomas Lo of FinaniciaLogix Group and Jose Cadalzo of Caplin systems, all questioned and moderated by Colin Lambert, Editor of Profit & Loss magazine.

The panel at P&L Forex Network

The discussion was wide ranging and touched on what institutional trading platforms can learn from retail traders, FX trading in Japan vs that in the USA, and on how different the requirements for software as a service for a bank might be from the service that Amazon and Google might offer.

However the main point that all of the panelists agreed upon was that when creating a single-dealer platform there isn’t really a choice between building it and buying it – every bank does some of each, but the issue is how much you buy and how much you build yourself.

The conclusion was that there’s very little point in spending time and money building anything that doesn’t differentiate you from your competitors. Differentiation can be in the pricing and the products, it can be in the content and analysis, and it can be in the way that the interface is designed and that information is presented.

An interesting conversation. I’m sure we’ll hear more about this in the weeks and months to come.

London daily FX vols rise to record $2.191 trillion (+30% yoy) – Bank of England official data


Today the Bank of England published the latest Semi Annual Bank of England FX survey (for April 2011), showing that Daily London FX vols at a record $2,191bln.

The survey shows that: Continue reading

Will top FX banks continue to lose market share to regional banks


The FX technology arms race continues unabated, with the top banks jockeying for position in the global FX rankings.

Leading banks in the global FX business are highly innovative, with a deep understanding of their clients risk management requirements. They also have the ‘luxury of large budgets’ and correspondingly large and talented in-house technical competence required to develop and deploy highly sophisticated functionality spanning the full trade life cycle from pre-trade, execution, through to rich post trade reporting tools targeted to specific client segments.

It’s also the case, that Continue reading

Celent report on Technology Systems in the Global FX Market: May 2011


Celent research report on Technology Systems in the Global FX Market

Extract from the report…

Single-dealer platforms (SDPs) are gaining popularity, and this is mainly related to banks’ technology investments. SDPs are providing greater speed and reliability of trade execution, because they create fewer hops from execution and low-latency technology. In addition to research and analytics, SDP clients are also benefiting from superior post-trade processing capabilities and STP solutions that the banks are offering.

etrading trends research by GreySpark


GreySpark (in conjunction with Best Execution) have released a detailed study on the trends in etrading.

It dispels some common industry myths… Continue reading

Another Reuters CEP announcement!


Like buses, nothing, then all of a sudden…. two at once (well nearly)!

Two days after Reuters announced the release of a hosted CEP aggregation service for FX, they follow that up today by announcing they have integrated StreamBase into their new Elektron platform.

The StreamBase CEP technology will be offered as a component within the Enterprise platform for Velocity Analytics to create an end-to-end quant system for back testing, algorithmic development and deployment. It will also complement the existing Thomson Reuters Dealing Aggregator FX trading offering by providing CEP capability in tandem with the low latency algo trading platform.

My thoughts: Continue reading

Reuters launches hosted FX Aggregation service (using Aegisoft)


Following the acquisition last year of Aegisoft, Reuters has now released a hosted FX liquidity aggregation and algorithmic execution enhancement capability for FX.

A welcome addition to the Reuters RET product suite.

It will be interesting to see to what extent Reuters ‘opens this up’, Continue reading

FX Clearing continues to be discussed (by academics!)


Bloomberg ran an article of a phone interview with Darrell Duffie, Stanford University Professor of Finance, who suggested that the risk of investor default in FX swaps and Forwards was large enough to justify post trade clearing through clearinghouses.

Continue reading

FXAll to register as SEF – my thoughts


Yesterday I blogged about how banks should be doing more to ‘future proof’ their single dealer platforms, by providing tools and services that would enable clients to continue dealing on SDPs with greater confidence, whilst complying with the evolving regulatory landscape.

I touched on the idea that bank SDPs should consider providing routing capabilities for client requests through to SEFs for products such as NDFs and FX Options if required: Continue reading

Celent study on Electrification of FX Markets


Celent study (summary available) on the ‘electrification’ of FX markets.

Summary of findings:

Algo trading, non-dealer and retail have driven ave ticket size down from $4.3mln in 2004 to $1.8mln in 2010, and number of daily trades up from 86k to 498k.

Single Dealer Platforms continue to gain in popularity due to greater speed and reliability of trade execution. Continue reading