Banks go big game hunting

摘要

There are only two ways for banks to make money out of foreign exchange these days. One is sheer volume, and the other is complexity. Since volume is a finite commodity, big FX banks are polishing their advisory skills to help them win the more complicated deals. The FX business has been, and continues to be, transformed by electronic trading. US research group Greenwich Associates suggests that a little over 50% of all FX customers now trade online, and that they are pushing more and more volume through electronic systems. Existing online users like the lower costs, improved efficiency and greater transparency of screen trading. Last year, the proportion of their online business rose by one-third compared to 2002, Greenwich says. So, all very satisfactory for corporate converts. For many big FX banks, however, the resulting market polarisation has been rather unsettling. Two banks that have made a strenuous commitment to technology have emerged as new, and distinct, market leaders - UBS, followed very closely by Deutsche Bank.