Fintech in Institutional Forex

Note from the Publisher:  We’ve often said we consider the financial markets to be the original fintech.  The trading exchanges revolutionized trading and ultimately brought the practice to the masses by moving beyond open outcry on the exchange floors to electronic trading – first off floor just for professionals – and then later to the masses.  This piece does a deep dive into forex trading from an institutional perspective.

“FinTech has become not only an integral part of the entire electronic financial services business, but is actually now leading the entire industry forward.

The electronic trading business, whether institutional or retail, has a number of key components which range from the Tier 1 banks which provide direct top level liquidity, through to the prime brokerages which aggregate the price feeds using very sophisticated systems, to the liquidity management and integration companies, trade clearing firms and then down to the platform providers……..Hardly surprising, of course, as London is the global centre for Tier 1 bank liquidity provision, as well as for non-bank aggregated liquidity delivered via electronic communication networks such as Thomson Reuters FXall, ICAP’s EBS, or Currenex.

Retail brokerages have never had so much choice with regard to order processing, liquidity management and trade execution methodology.  Many firms, including Danish FinTech and electronic trading company Saxo Bank, have designed a series of tools to optimize their flow to the market and then using that technology to benefit corporate clients which are brokerges.”

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