In the latest edition of The Financial Technologist, Harrington Starr’s industry-leading magazine, Edgewater Chief Product Officer Brian Andreyko unpacks the impact of the evolving FX landscape in emerging markets.
Who disrupts the disruptors? In emerging and frontier markets, local banks are answering that question with modern technology and unique paths to liquidity.
The global foreign exchange (FX) landscape is a perfect example. In recent years, large financial institutions have entered emerging markets for the first time by trading local currencies and establishing their presence in the local markets to better serve their global clients. With powerful technology and deep pockets, these firms have wrested significant market share from both the local banks as well as the smaller, more regionally focused banks that have historically dominated their currencies.
How? It boils down to a lack of modernization. In most emerging markets, FX trading is defined by outmoded processes, from manual price discovery to voice trading. The global insurgents have robust electronic capabilities in these areas and more – particularly in the equities market, but increasingly in FX as well. The combination of their technology, headcount and reach means they can fill more trades and serve more clients with a wider array of execution solutions – all while maintaining more bandwidth to innovate.
Read the full article HERE (p. 58-59)
