Cloud will dominate FX by 2025, Integral survey finds

By Sunniva Kolostyak

Cloud technology is set to be the major disruption for the foreign exchange industry in the coming years, according to a survey commissioned by technology and trading platform provider Integral.

According to the Integral report, which surveyed heads of FX trading and senior FX managers at financial institutions across Europe, North America and Acia Pacific, the $6 trillion industry will see major disruption from cloud computing and trading technology upgrades in 2021 and beyond.

Cloud, in particular, will make significant headway over the course of the next five years. The findings showed that 98% of the surveyed plan on featuring cloud in their FX workflows in some capacity – 28 per cent stated that they will operate their FX technology completely in the cloud within the next five years, compared to the current figure of 2 per cent. An additional 41 per cent will be using some combination of cloud and on-premise technology, compared to 24 per cent at present.

The FX SaaS provider said these findings indicate that multi-dealer platforms will see the biggest rise in usage compared to other trading channels in the next 12 months.

Commenting on the findings, Harpal Sandhu, CEO 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, customisation abilities and remote accessibility will continue to be necessary requirements of a sophisticated workflow.”

Integral also found that an increased emphasis on relationship trading has pushed API trading into focus for many, and one third of the respondents are expecting this trading method to rise in popularity over the next 12 months.

This interest in API trading underscores a trend toward institutions leveraging increased control over brand and distribution technology, while maintaining lower operational costs through outsourced FX technology.

Respondents signalled the expected shift to cloud is driven by lower cost of technology, ease of integration, automation, ability to customise, and accessibility for distributed workforces.

Integral provides FX tools to financial services providers such as Swissquote, Sberbank and Western Union.