Head in the Cloud – Why Cloud Will Take Over FX Trading Tech?

The momentum behind cloud in the financial markets is building rapidly. Last year, over two thirds (69%) of the respondents to our “Future of FX trading” survey expected FX trading flows to be either entirely in the cloud, or to use a hybrid of cloud and on-premise solutions. Perhaps more significantly, nearly a third expected to deploy their FX tech stack completely on cloud by 2026.

The underlying reasons for this acceleration are clear. The pandemic and the prolonged period of remote working entrenched the need for flexible off-premise technology. As COVID effects have eased, far from reverting to working on-premise, financial institutions have seen the benefits of working across time zones and locations remotely and have shifted to a hybrid state of affairs. With little sign of working practices returning to “normal” the configurability of cloud-based SaaS solutions means it is becoming the go-to technology for FX workflows. For both banks and retail brokers, implementing cloud-hosted solutions will result in unparalleled benefits.

It’s easy to see why so many view SaaS as the strategic choice. The cost-benefits are well known, and the potential to reduce cost of ownership has drawn the attention of nearly every business – not just in financial services – operating remotely the past two years. However, the accelerated movement toward SaaS in FX has other benefits beyond concerns over budgets and the bottom line.

From a macro perspective, cloud can act as a democratizing force for firms operating across FX and capital markets globally. Why? Because it is synonymous with agility, flexibility and powerful computing capacity. The lower costs, coupled with high-quality technology provided by technology partners, enable businesses to compete and win on a global scale. Each institution, no matter its size or customer base, ends up with access to top-tier technology that easily accommodates workflows to meet unique business requirements, while also maintaining rigorous standards enabling better customer experience.

Digging deeper into the operational benefits, in today’s hyper-competitive environment where low latency is critical, connectivity and software hosted on private cloud has already proven their value in this regard. For less time-dependent workflows, such as post-trade analytics, public cloud is sufficient and has the same cost benefits. But private cloud enhances liquidity sourcing, price discovery, pre-trade analytics and MetaTrader bridging. Across the FX industry, the opportunities are endless with cloud.

Judging from what appears to be a permanent hybrid approach to work, cloud has to be front and centre for any FX market participant. Looking ahead, expect to see more developments on cloud. It will be with these Software-as-a-Service (SaaS) technology providers that banks and brokers can gain the edge, modernizing and growing their FX business along the way.

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