Algorithms drive buy-side currency trading shift to nonbank firms

1 articles · Updated · Bloomberg · Apr 28

A Crisil Coalition Greenwich report reveals about 25% of buy-side trading desks now use or plan to use nonbanks for FX executions, primarily through algorithms.
Nonbanks attract buy-side traders with superior pricing models, quality offerings, and a technology-first approach, challenging traditional banks in the $9.5 trillion-a-day foreign-exchange market.
The growing adoption of algorithmic trading is fueling debate over the future role of banks versus independent firms in global currency markets.

As algorithms dominate FX, are traditional banks losing their edge to nimbler tech firms for good?

Is the rise of nonbank traders creating a new 'shadow banking' system with hidden systemic risks?

With trades executed in milliseconds, has human oversight of the $9.5 trillion FX market become impossible?

When the next crisis hits, will these independent FX firms vanish, leaving markets without liquidity?

How can regulators effectively oversee a financial system increasingly run by complex, third-party AI algorithms?

Can AI trading algorithms truly predict markets, or are they setting the stage for the next flash crash?