Integral has conducted a survey of 94 heads of FX trading and senior FX managers which highlighted the prominent role of the cloud in the future, a preference for established and some new liquidity distribution channels, and concern around the cost of FX technology.
Most respondents said the global effects of the pandemic on the FX industry has accelerated existing trends, while 24% suggesting it caused temporary changes, 7% said it caused permanent change and 16% believe it caused no change.
The survey found nearly all respondents believe Cloud is set to become an entrenched part of market structure for FX trading in the next 5 years. 28% will operate their FX technology completely in the cloud, compared to the current figure of 2%. An additional 41% will be using some combination of cloud and on-premise technology, compared to 24% at present. And 29% expect to use the cloud in a more limited fashion.
Nearly half of respondents confirmed that MDPs are expected to see the biggest rise in FX trading in the next 12 months, followed closely by APIs at 33%, Mobile trading at 17% and SDPs at 2%. Integral’s survey last year found SDPs to be the most popular platform for electronic trading.
Cost is the obstacle to updating FX trading technology, followed by ease of integration, ability to customize, time to market, accessibility from anywhere, and ownership, the survey concluded.
Harpal Sandhu, Chief Executive Officer of Integral, said: “This past year has proven that the future of FX trading is highly dependent upon technology. It is no surprise that in the next five years cloud computing is projected to feature in the workflow of almost everyone surveyed. Looking ahead, we expect that the increased use of cloud will help market participants of all shapes and sizes perform their FX functions on a daily basis cheaper and more efficiently, and that time to market, customization abilities and remote accessibility will continue to be necessary requirements of a sophisticated workflow.”