Robin Poynder Head of FX Customer Solutions, Reuters.
Robin Poynder Head of FX Customer Solutions, Reuters.

Build, buy or partner: e-FX strategies for the sell-side

Robin Poynder looks at the choices facing banks wishing to offer new e-commerce services.

First Published: e-Forex Magazine 23 / Features / April, 2006

eCommerce FX trading has grown enormously in recent years and is now integrated into the market – but what are the choices for banks who wish to enhance or provide new services to their customers, either as a core liquidity provider or through another larger institution?The extent to which FX trading via eCommerce has been adopted by customers has attracted much comment, with the top ten banks transacting some 65% of daily turnover1. Whilst core liquidity may be concentrated within a few institutions, many banks have a solid regional customer base to which they provide a range of services, with foreign exchange being simply one of many. Often these banks will redistribute liquidity that is sourced from the core banks rather than from themselves, focusing more on how they can provide an e-trading service that satisfies their customers, generates income and adds only limited costs. Regional banks will normally retain some FX price making capability within the dealing room. This may be centred on major...continued

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