E-TRADING -- FXall maintains lead among multi-banks

Last year the focus was survival following the closure of bank-owned Atriax and SunGard’s STN Treasury. E-trading is now viewed as an integral part of business and attention has shifted to profit-making.

In this climate, FXall retained its top position as best multi-bank FX portal and won top nominations from banks and corporates. The platform has seen growth in every major area of the marketplace over the last 12 months and enjoyed a five-fold year-on-year increase in volume, said Mark Warms, global marketing manager of FXall in London. "To attain the critical mass of business to ensure a viable business model means providing multiple products to every major segment of the institutional FX market," he said. "Our success with this strategy has contributed to FXall going cash-flow positive this year."

FXall sees most competition from niche players, said Warms, and this was borne out by investor voters’ nomination of State Street’s FX Connect as best portal. The platform owes much of its success to its established client base, said Simon Wilson-Taylor, head of Global Link, which hosts FX Connect. "We’ve been in business for more than seven years and the lead that we’ve established in the first four years is very difficult for others to overcome." One of the platform’s key differentiators is the type of clients it services, he said. "They are very large players doing very large volumes -- both in size and numbers of transactions," he said. "Straight-through processing is better suited to their trading style." About 90% of the medium to top-end of that marketplace now uses e-trading platforms in some form, he said.

Furthermore, both customers and banks enjoy the "intimacy" that the portal retains between client and trader, he added. Although it is offered, most banks have chosen not to implement automatic pricing on the back-end of FX Connect, said Wilson-Taylor. "They choose to have the orders handled by sales people because of the size and number of transactions involved," he said.

Both portals have made efforts to crack additional sectors. FXall has gained ground with institutional clients this year -- in January they accounted for 40% of all volume on FXall, and now total about 55%, said Warms.

Meanwhile, State Street’s partnership with SunGard -- which embedded FX Connect into the treasury workstations of Sungard’s clients -- is starting to bear fruit in the corporate sector, said Wilson-Taylor. "There are currently about 10 clients using it on a regular basis with up to 60 in the pipeline."