Biggest banks dominate rankings for proprietary forex dealing e-systems

BEST BANKS SURVEY 2001 -- SINGLE-BANK TRADING SYSTEMS

The biggest global FX players still offer the best single-bank internet trading sites, according to this year’s FX Week Best Banks in FX Awards.

Global banking giants, led by UBS Warburg, then Goldman Sachs, Deutsche Bank and Citigroup took the top four positions in the category this year, although mid-market player Dresdner Kleinwort Wasserstein’s Piranha product -- one of the first web-based FX systems to launch -- continues to be highly-rated by industry participants, in fifth place.

The success of UBS Warburg’s single-bank suite of transaction products, called Fx2B, is particularly impressive as the system only launched in May 2000. Now, 35% of the bank’s wholesale FX transactions are processed over Fx2B (FX Week, November 19).

"We’ve found that dealing over the internet has hit a chord with a variety of clients -- banks, corporates and institutions," Fabian Shey, managing director and global head of e-commerce, interest rates and foreign exchange at UBS Warburg in London, told FX Week.

In votes from buy-side users, UBS Warburg was rated top by corporate FX clients, while Goldman Sachs’s WebET trading system won the institutional investors’ ranking.

This victory for Goldman could reflect recent product enhancements, such as improved straight-through-processing capabilities, the addition of more currency pairs, and functionality to enable real-time trading in exotic options, Zar Amrolia, head of FX sales and e-commerce at Goldman in London, told FX Week.

Vikas Srivastava, global head of e-commerce at CitiFX in New York said Citi’s success was likely due to its facility for calculating daily benchmark prices using inter-bank market prices. "We have gained a high percentage of some clients’ market-share because of this feature," Srivastava told FX Week. The facility allows clients to net trades from their subsidiaries, and trade them at benchmark prices -- that is, prices that reflect where the market, not Citigroup, is trading. Additionally, the feature combines different asset classes, so an equity transaction with an underlying FX component, for example, can be automatically routed to CitiFX’s benchmark price.

Dresdner’s Piranha system has continually evolved since its July launch in 1999, and now boasts more than 600 clients globally. This year, the platform was extended to include money markets trading, and now includes a full suite of FX forwards products. Next year, the system will include an integrated order management facility, which, said Allan McKenzie, London-based head of business development for global FX, would be a "unique offering".

This advanced functionality could be key to the survival of single-bank trading sites, as they increasingly compete with electronic systems that enable clients to request quotes from multiple dealing partners at the same time, such as Currenex, FXall and Atriax.

But, said the banking officials responsible for the top-rated proprietary offerings, their systems would always have a place -- in part because of the advanced functionality they describe above. McKenzie, for example, believes multi-bank portals will not be able to offer features like Dresdner’s planned integrated order management facility.

Others said that while some clients may switch to multi-bank platforms in the interests of getting better currency prices, many would be satisfied with existing proprietary systems.

"Margins are already very narrow in foreign exchange, and prices are already transparent. UBS Warburg offers very competitive FX prices, and the difference in transparency offered by portals will not be very significant," Shey told FX Week.

Joe Norena, head of FX e-commerce at Deutsche Bank in New York, told FX Week: "There is space for both single and multi-bank trading offerings -- the challenge for banks is to differentiate themselves on these systems." Deutsche’s single-bank system, FX Markets Trading, took third place in this year’s Best Bank Awards.

All banks in the top five are also participants in multi-bank trading initiatives. Goldman Sachs, UBS Warburg and DrKW are three of the 16 equity partners in FXall, while Citigroup and Deutsche Bank are two of the four owners of the Atriax consortium, alongside JP Morgan Chase and information vendor Reuters.

  • LinkedIn  
  • Save this article
  • Print this page  

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact customer services - www.fx-markets.com/static/contact-us, or view our subscription options here: https://subscriptions.fx-markets.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

You need to sign in to use this feature. If you don’t have a FX Markets account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: