FXall edges ahead of rivals

FXall is edging ahead in the battle for supremacy among multi-bank FX trading portals, according to a major survey of the market made public last week.

The survey, conducted by UK research and analytics firm ClientKnowledge, polled more than 1,500 corporate and institutional FX buyers globally, and found that FXall has been the main beneficiary of the closure of bank-owned rival Atriax in April this year.

The battle for market-share in Europe appears to remain wide open, according to the survey. Thirty one percent of corporates polled in Europe named FXall as their preferred platform, compared with 29% for Currenex.

But FXall has a clear lead among US corporates. Among those polled, 65% of corporates cited FXall as their preferred multi-provider platform, compared with 30% for Currenex.

The institutional side also saw FXall ahead in Europe, with 25% of the vote, but in the US, State Street’s FX Connect was preferred by 57% of institutions.

ClientKnowledge added that while Currenex’s volumes, in the firm’s opinion, are static, FX Connect’s volumes have nearly doubled in the last six months, and "FXall is enjoying considerable growth".

"FX Connect’s volumes have increased by 80% in the past six months," said Simon Wilson-Taylor, head of State Street’s Global Link platform, which hosts FX Connect. "That’s the sort of growth we have been seeing since we launched."

Lori Mirek, president and chief executive of Currenex, said: "Currenex’s customer base has been exploding, with more than 1,900 connected users."

The report also concluded that the multi-bank sector will continue to experience strong growth in uptake.

"The space has now moved from a situation where people were looking at platforms to where they are actively considering integrating multi-bank trading into their workflow," Justyn Trenner, chief executive of ClientKnowledge, told RiskNews' sister publication FX Week.

Among European corporates polled by ClientKnowledge, 5.6% traded over 50% of their FX volume electronically, but 12.8% expect to trade over 50% into 2003. Of European institutions polled, 14.3% expect to trade over 50% in 2002/03, from 5.6% in 2001/02.

In the US, meanwhile, 9.2% of corporates currently trade over 50% through the portals, with that figure expected to grow to 15.5%. But it is in the US institutional sector that the most uptake is expected, according to the survey. The number of corporates trading over 50% through portals is 19.6% currently, but that is expected to grow to 28.3% in 2002/03, the survey said.

Part of this enthusiasm has arisen due to Atriax’s exit from the multi-bank arena in April 2002. "With Atriax gone, three main providers and a number of smaller players with slightly different models still provide plenty of choice," the report said. "Although the buy-side will favour a degree of competition, too much choice proved a show-stopper last year."

Atriax’s demise has also banished the issue of liquidity in determining the relative merits of the competing portals. Following Atriax’s closure, the report said, most of the major FX liquidity providers have started to participate in all three of the main platforms, removing liquidity as an area of keen competition between the portals.