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
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