2005: The Year of e-FX Pricing

Donal Austin assesses the reasons that Price Engine providers have been better able to design, develop and deliver user friendly and market-aware FX electronic pricing solutions.

After many years of fear and tentative uptake, the era of e-FX Pricing has finally arrived for global FX Liquidity providers. Leading FX Banks who steadily continued experimenting in e-FX despite early pains, have learned valuable lessons Ð so have the Vendors working with them.All involved in e-FX had to survive the budget cutbacks post Y2K, the Dot.com bubble burst and 9/11. However, the players who adapted their business models to the realities of the marketplace are now reaping real rewards, as revealed by the latest Euromoney and BIS surveys. In the best case Banks, e-FX business approaches 75% of total FX trading volumes. The average across all top tier FX players stands at around 40%.Vendors are now supplying battle tested Price Engines with realistic and viable upgrade strategies. In addition to expanding Product Suites, banks and software providers are now including new sub-asset classes, such as Options and other Derivatives in their offerings. Customers are always asking for more, and to...continued