This article is authored by John Stead, Director of Sales Enablement & Marketing at smartTrade
smartTrade was pleased to participate and sponsor the Full FX Scandinavia event as well as host a well-attended client dinner in Copenhagen.
Several key themes emerged: market structure evolution, the drive for efficiency and better client service, optimizing execution and risk, and deepening client relationships. The overarching message was clear: adaptation and innovation are strategic imperatives.
Technology & Regional Banks: Partnerships Drive Growth
A core discussion, particularly in the “Staying in the Race” panel, addressed challenges faced by regional banks. The technology race continues unabated, making extensive proprietary system builds unviable for regional players managing growing client bases under cost pressure.
The solution increasingly lies in sophisticated partnerships, evolving from traditional white-label models. Banks seek partners offering integrated workflow solutions to address legacy tech and streamline the trade lifecycle. Success requires a mindset shift towards new operating models and diligent evaluation, recognizing strategic technology investment is vital for competitiveness. Finding the right number of liquidity providers was also discussed – enough for resilience and pricing, but not so many as to fragment flow or increase leakage.
Transparency, Performance, and Quantifying Value
Sessions highlighted increasing client demand for transparency, now keenly focused on system performance and resilience, especially during volatility. A platform’s ability to maintain performance during data spikes directly impacts client execution quality and cost.
This shifts client focus beyond basic connectivity to value-add: robust, low-latency, stress-tested platforms providing sophisticated data analytics to quantify execution costs. Tech providers are expected to be partners, offering insights and modular solutions that integrate and enhance user experience.
While the Global Code standardises LP conduct, a lack of standardised tech provider performance metrics was noted. This challenges bank evaluation but offers providers differentiation through clear, auditable data. The market bifurcation was also implicit: non-banks dominate primary pricing, with banks leveraging these markets and technology for their client-facing, credit-intermediated business.
AI in FX: The Latest Evolution
My participation on the panel “AI in FX: Game Changer or Latest Evolution?” explored AI’s practical impact. While not yet a disruptive “game changer” for core trading decisions for most, AI is undeniably the “latest evolution,” bringing significant current benefits.
Opportunities discussed included:
- Enhanced Efficiency: Automating repetitive tasks (e.g., platform config, operational workflows), freeing human resources for higher value.
- Improved Risk/Client Insights: Analyzing data for pattern identification, flow trend prediction (netting), nostro optimisation, and client segmentation (upsell, issue detection). smartTrade’s Copilot is in production, providing client activity summaries and automated translation.
- Augmented Decision Making: Acting as a co-pilot, rapidly processing data to suggest trading signals or optimise liquidity settings based on performance.
Challenges like data quality, bias, regulation, and the “black box” were acknowledged. Potential for AI dominance/herding necessitates robust safeguards and human oversight. Distinguishing true AI from simple automation is also crucial for realistic expectations.
The consensus was AI currently complements human expertise. It handles data-intensive analysis, allowing humans to focus on strategic judgment, relationships, and market nuance.
Concluding Thoughts
Full FX Copenhagen 2025 depicted a dynamic market. For Heads of FX Trading and Sales, success relies on proactive technology adoption and strategic partnerships. This means:
- Evaluating tech on demonstrable efficiency/client service improvements, not just connectivity.
- Seeking partners providing robust platforms who collaborate on change/regulation.
- Leveraging data/analytics for insights into dynamics, execution, and client behavior.
- Strategically integrating AI for automation, enhanced analysis, and personalized interactions, ensuring responsible development/oversight.
The market demands greater transparency and performance from technology. By embracing innovation and forming the right alliances, FX professionals can navigate this landscape, optimize operations, and serve clients effectively.
For further discussion on these topics or smartTrade’s trading and payments solutions, please feel free to contact me. I welcome the opportunity to connect.