As FX firms evaluate their technology strategy, how should they weigh the merits of a purely build, buy, or a hybrid ‘Buy+Build’ approach?
When firms are deciding whether to build, buy, or combine both approaches with their tech, there are a few things to keep in mind. Off-the-shelf solutions can be a quick and cost-effective way to get started, but true plug-and-play is rare—most turnkey systems still need customisation and in-house work to fit specific needs. The skills for this aren’t always available internally, and long-term maintenance can be a challenge. For firms where speed and cost are the main priorities, buying makes sense in the short to medium term. But for the long term, building your own tech stack has big advantages: more control over core technology and IP, no vendor lock-in, and the ability to move quickly as markets or regulations change. Owning the source code lets you innovate, scale, and expand as needed, without waiting for a vendor. In a crowded market, having something truly your own can set you apart.
Ultimately, it’s about balancing the need to get to market quickly and affordably with the benefits of being able to differentiate, future-proof your business. There’s no one-size-fits-all answer, but those are the main trade-offs to consider.
Given current market dynamics, how do these considerations specifically impact FX firms?
With the move to T+1 settlement in North America and Europe following in 2027, the way FX firms operate is really changing. We’ve also seen a lot of volatility in the markets lately, often tied to geopolitical events, and there’s a real shift happening in liquidity—some of the big banks are saying the market might not be as deep as it looks, partly because there are so many platforms and a lot of AI-driven trading. In this kind of environment, it’s crucial to adapt and take control quickly, and honestly, that’s usually only possible when firms own the critical parts of their tech stack.
What areas of the FX vendor ecosystem are most ripe for disruption today, and why?
Two areas are particularly ripe for disruption. The first is infrastructure, driven by the ongoing shift to the cloud. Historically, the decentralized, over-the-counter nature of FX markets created a complex and fragmented landscape, where expensive intermediaries were needed to connect trading counterparties. Cloud is fundamentally changing this dynamic. Firms can leverage the cloud’s scalable and cost-effective connectivity which has the potential to dramatically reduce reliance on traditional intermediaries and their high facilitation fees, enabling more direct and transparent bilateral trading. Cloud adoption also democratizes the market, lowering the barriers to entry for smaller firms that can access high-performance infrastructure without massive upfront investment.
The second area is AI and machine learning. Many people see it as a bit of a buzz word these days but it has huge potential beyond simple task automation. The FX market’s unique characteristics – massive size, high transaction volume, decentralized nature – make it a good fit. For trading and execution, AI models can analyze immense datasets—including news sentiment and economic indicators—in real-time to predict market movements and execute trades with speed and precision. In risk management, AI can be used to detect fraudulent activity and manage market exposure by identifying correlations and volatility patterns, allowing firms to quickly adjust their positions.
Breaking down the FX value chain, which components are best suited for in-house development, outsourcing, or procurement?
For firms looking to get to market quickly and keep costs down, it can make sense to outsource the parts of their tech that aren’t unique to their business—things like basic infrastructure, messaging, or clustering. But when it comes to what really sets a firm apart, like business logic or proprietary trading platforms, that’s where it pays to build in-house. Developing your own trading algorithms using your own data and strategies can give you a real edge, and these custom-built pieces become the foundation for what makes your offering different. The key is to find the right balance—think of it as building blocks—between what you buy and what you build on top, making sure everything is tightly integrated to avoid long-term maintenance issues.
Meeting regulatory requirements is critical for financial institutions. How might this impact the decision to build or outsource fintech functions?
This isn’t just a tech problem—it’s a business strategy decision. With regulations like DORA putting the onus on FX firms to truly vet their tech providers, the old “buy it and forget it” model is no longer working. Some top vendors offer great solutions, yet you are always relying on their roadmap and their priorities. On the other hand, when you own your code, you have direct control over your resilience and ability to adapt as the rules inevitably change but that comes at the cost of a higher initial investment and the ongoing need of maintenance. Ultimately, it’s about balancing the compliance risks of outsourcing with the control and flexibility of building, and making sure you have the right expertise in place. This is a challenge every firm in the space is facing right now.
What factors and technical considerations are important for financial institutions in the choice of suitable fintech providers for them to partner with?
There are a few key things to look for. First, you want a true partner—not just a vendor you hear from once a year at renewal. It’s important to find someone at the forefront of open-source, cloud, and AI, since that’s where most innovation is happening. Flexibility matters too; your partner should offer a range of support options, whether you want fully managed services or prefer more control in-house. Just as important, look for knowledge of distributed architectures and state machine replication—these are fundamental to how resilient, high-performance trading systems are now built for critical functions. Reputation is crucial. You need a partner with a strong track record who can support international operations. Check who they’ve worked with—if they have partnerships with leading tech firms and financial institutions that have delivered real results, that’s a good sign they can help you stand out and stay ahead.