Corporate treasurers anticipate a dramatic shift in foreign exchange execution methods over the next five years, according to an Integral survey released Wednesday. Voice trading is expected to plunge from 34 percent to just 10 percent of the FX mix, while API-based execution surges from 18 percent to 42 percent of total activity.
The survey of 67 corporate treasury teams and 76 financial institutions reveals significant implementation hurdles despite enthusiasm for automation. Eighty-three percent of treasurers cited at least one barrier to automation, with large corporations blaming legacy systems and fragmented infrastructure. Mid-market firms pointed to inconsistent bank API standards requiring resources smaller teams cannot provide. Only 19 percent of sell-side participants reported having predictive analytics capabilities.
Multi-dealer platforms are projected to maintain dominance, rising modestly from 34 percent to 37 percent share, while embedded execution within treasury management systems is forecast to more than double from 12 percent to 26 percent.
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FXnCO Insight
** Banks and technology providers offering standardized, easy-to-integrate API solutions will capture the largest share of growth as treasurers automate FX execution over the next five years.
Source: Finance Magnates