Interview with Benedict Carter, Leader of Foreign Exchange Spot Quantitative Trading
In the dynamic world of foreign exchange trading, a bank's success hinges on its clients. Without client interaction, the bank would not be in its current position. Recognising this, the bank has identified client interaction as a key area for growth in 2024.
To enhance the client experience, the bank has integrated PRO technology into its FX Spot offering. PRO allows clients to interact with the bank's website's liquidity in a passive way, earning a spread instead of paying one. This innovation not only increases the bank's internalisation rate but also reduces market impact for the entire client franchise.
The advantages of this technology integration are manifold. Enhanced risk management, increased trading accuracy and speed, broader market access and diversification, automation of trading processes, and improved client experience through better data insights are just a few of the benefits. These contribute significantly to client competitiveness by enabling faster, more precise, and efficient trading with reduced human error and stress.
Industry insights highlight several key advantages of these technological enhancements. Automated Trading & Risk Management offers strict risk controls, executes trades with perfect adherence to pre-set plans, and operates continuously 24/7 without emotion-driven errors. This leads to improved profit potential and stress reduction for traders.
Advanced platforms also facilitate multi-market and multi-asset trading, helping clients diversify risk and exploit a wider range of opportunities. High-Speed Execution & Infrastructure ensures fast and precise trade execution through integration with DMA platforms and APIs to Tier-1 liquidity providers. Seamless Platform Integration enables real-time synchronization of client data and trades, eliminating manual errors and streamlining client management for brokers.
The use of AI and Machine Learning improves decision-making by analysing large datasets, adapting to market changes, and consistently executing trades faster than humans. This boosts trading efficiency especially for retail clients.
These technological enhancements directly contribute to client competitiveness by offering faster reaction times to market changes, reducing operational risks and errors with automated, algorithm-driven processes, allowing clients to trade more markets with better price accuracy and liquidity, enhancing client retention and service via integrated CRM and analytics, and enabling both novice and experienced traders to maximise trading potential without needing deep manual oversight or expertise.
The FX Spot team has been supporting clients with thought leadership, publishing research on optimising executions. Towards the end of 2022, the client algo STARK was upgraded, allowing clients to change liquidity sources and execution style on the fly. The upgraded client algo STARK allows clients to adapt the algo's behavior in real-time based on their changing requirements.
The bank's Principal Resting Order technology (PRO) has been included in the FX Spot offering, further enhancing the client experience. The team has been assisting clients in running experiments and analysing data, providing theoretical foundations for optimising executions.
In sum, technology integration in FX Spot trading empowers clients with superior tools—automation, speed, analytics, multi-market access, and robust risk management—resulting in more efficient trading strategies and improved competitive positioning in the global forex market.
- Recognizing the bank's focus on client interaction as a key growth area for 2024, the integration of PRO technology into the FX Spot offering aims to provide clients with a passive way to interact with the bank's liquidity, earning a spread instead of paying one, thereby enhancing the overall client experience.
- As part of the bank's FX Spot offering, the Principal Resting Order technology (PRO) and the client algo STARK have been upgraded and integrated, offering clients the ability to adapt their execution behavior in real-time, change liquidity sources, and optimization of executions, all with the ultimate goal of improving the client's competitive positioning in the global forex market.
