FX operations: The next frontier for mutualisation

As the FX market continues to grow and cross-border transactions increase in size and value, so too does the expectation of customers in terms of lower costs and better services. In a joint paper with Broadridge, we examine a possible reshaping of the FX operations market, capitalising on mutualisation to potentially reduce costs and increase efficiency.

The paper, titled ‘FX Operations: the next frontier for mutualisation’ provides a view of the current challenges affecting FX, along with a potential function model which may help make operations as efficient and cost-effective as possible.

The FX market continues to flourish as more currencies and markets come online and cross-border transactions increase in size and value. This also comes with higher volumes from speculation. Yet with increased volumes and growth come higher expectations from customers in terms of lower costs and better service. These expectations, coupled with increased regulation for best execution and reporting, create an ongoing operational headache for the banks underpinning the transactions.

We believe these challenges may best be answered through the effective use of an evolved ‘full-service’ managed service provider (MSP). To test this hypothesis, GFT and Broadridge have formed an industry working group to define a future state model, and this paper explores the existing market challenges and our blueprint for this new efficient model.

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