The TRADE 56 - Page 57

The battle with legacy technology systems is ongoing concern for many banking institutions, but arguably no more so than w foreign exchange. With an explosion of market data and increasing market fragmentation, Hayley McDowell finds that strategies at large FX institutions have never been more important for staying ahead of the game. he bigger the bank, the bigger the problem. It’s a common perception, and complaint, when it comes to trading systems and technology in an increasingly complex foreign exchange (FX) landscape. Now, more than ever, FX institutions must process greater volumes of data and connect to more venues than ever before, all at phenomenal speed to avoid high-frequency traders or being left behind other market players. In this context, technology is undoubt- edly a game-changer. It’s no secret that some large institutions continue to rely on numerous systems which were imple- mented 25 years ago. But as the trading game evolves under new regulation, technologies and changes to the market structure, banks are rapidly finding out that those legacy systems simply can’t hack it anymore. For those firms, the task ahead is truly monumental. Around five years ago, FX leaned towards a relatively small number of venues when markets were volatile, but now volume scatters across a larger range of more than 70 FX trading venues. This means banks are tasked with connecting to those venues Issue 56 // // 57