Frances Maguire
Frances Maguire

Build versus buy: post-trade choices facing FX trading venues

Despite the current budgetary constraints, the difficulties in improving post-trade processing for the spiralling number of FX tickets is still tempting the banks and FX trading venues to build rather than buy. Frances Maguire looks at the choices involved.

What do you see as the key challenges facing banks when operating in such an enormously diverse market like Retail FX? Inkster: Retail FX is a market that has typically been dominated by smaller, specialist brokers and the hurdles that established Banks have had to overcome in order to enter the market have been numerous. Firstly there have been major concerns about reputational risk – many of the smaller niche Brokers have not had to worry particularly about the impact that poor client experience or high burn-out rates might have had on them. And so one of the key challenges has been to educate clients how FX can be used as an asset class to provide positive returns uncorrelated to more traditional investments that they may hold.  The Bank placing itself on the same side of the table as the client has been key – it is important that the best interests of the Bank are served by developing a base of successful, highly-profitable clients. This can be achieved with the provision of neutral...continued

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