Trends in FX Trading 2020

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A Market That Simultaneously Concentrates & Disperses

This report examines the change in the structure of the global flow FX marketplace as it continues to shift away from the historic prevalence of the dealer-to-client and dealer-to-dealer modalities familiar to investment bank broker-dealers and their buyside firm clients and counterparties. In place of the old structural paradigms, an all-to-all structure emerged completely for the first time in 2019 as the majority of spot FX trade execution volume was done on an automated basis, according to GreySpark analysis of the Bank for International Settlements 2019 Triennial Central Bank Survey of Foreign Exchange and Over-the-Counter Derivatives Markets.

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Specifically, the 2019 BIS FX turnover survey highlighted a changing distribution of flow FX trading across both geography and product mix. On the geographic front, currencies execution became more concentrated geographically for most products, in part driven by increased liquidity internalisation. Moreover, the FX product mix diversified in terms of volume. These changes have significant import for business model design and execution for sellside institutions.

This report explores how the changing market dynamics within the FX space drove a flurry of activity focused on replacing or implementing fit-for-purpose e-trading solutions, with the design and deployment of technology stacks for the use of different market participants and ever-changing FX business models far from uniform. In 2020, both sellside and buyside FX trading technology stacks comprise an often-diverse set of vendor offerings and in-house technology solutions.

Published on: 11 Mar, 2020
  • 1.0 BIS Analysis: The Future Has Arrived
    • 1.1 Symbiosis of Electronification & A2A Trading
    • 1.2 The Role of Primary Platforms
  • 2.0 Location, Location, Location – and Speciality
    • 2.1 The Top-5 Geographies
    • 2.2 EM’s Place in the Sun
  • 3.0 Addressing the Technology Challenge of Electronified FX Markets
    • 3.1 Growth in Platform Market & Activity
    • 3.2 The Nature of the Challenge & the Solution
  • 4.0 Appendices
    • 4.1 Table of Figures

Report Data & Figures

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