Critical to the entire fabric of the trading infrastructure which our industry depends on is the means by which traders are connected to markets.
This constantly evolving technology sector is one of the most highly advanced and fast moving innovation stages in the world, regardless of industry, and currently the method by which trades are executed, platforms are connected to trading infrastructure, latency, risk management and best execution practices are high on the agenda of all firms.
Today, LeapRate spoke to James Banister, CEO of FXecosystem. Mr. Banister is a highly experienced industry executive with over 20 years worth of experience, mostly centered around FX eCommerce products.
Prior to joining FXecosystem in his leadership role 5 years ago, Mr. Banister’s career includes almost a decade at Citigroup, as well as the successful leadership of the launch and growth of major Global Electronic franchises, including Citigroup’s 1st generation FX trading platforms as well as the successful multibank platform FX Alliance Inc (FXall), one of the most well-respected global multi-bank trading platforms in the market, subsequently purchased by Reuters.
Mr. Banister went on to become Managing Director at Bear Stearns, running its EMEA FX eCommerce business before changing his focus to manage and develop high growth FX-related SME businesses, therefore is clearly very much a respected authority in these matters.
Mr. Banister details his view on the five years that have passed since the establishment of FXecosystem, and what advancements are next in the realms of connectivity.
FXecosystem has now completed five years since establishment and during that time, connectivity has evolved substantially. What is the most important overall change in connectivity technology during this period?
The latest hardware is far faster at switching packets than it was five years ago and network connectivity has evolved from 10-40Gb. The advances in hardware combined with network connectivity improvements have resulted in latency being reduced to nano seconds.
Speed is just part of the equation – we also focus heavily on precision and reliability. The level of reporting and analytics available today has substantially improved over the last five years and this adds huge value to our offering to clients.
In terms of more general changes, as an industry we have seen an increased focus on London as the largest international centre for Foreign Exchange and connectivity. It’s great to be at the heart of this and I believe that there are more exciting developments to emerge from London in the future.
What has been the firm’s greatest development and achievement over the last five years?
FXecosystem launched in 2010 to bring leading connectivity solutions to a wider audience at a more economic price level. All of our leading Institutional clients who started with us are still using our services but are now using them in more diverse ways.
Our aim from the outset was to change how the FX market connects and lead the way in terms of outsourced connectivity services for the FX market – and we really have done that. We continue to invest heavily in our infrastructure in order to remain at the forefront of our industry.
We have achieved a lot over the last five years, with a growing presence in the major datacentres in London and North America, and have grown a client base consisting of major FX banks, ECNs, brokers and buy-side clients globally.
The last two years have been particularly successful for us. We have seen growth from all of our global institutional clients. It’s the retail side that’s been one of our fastest growing area of our business. The retail market has evolved to be much more professional and we are seeing demand from an increasing number of sophisticated retail brokers wanting co-location in LD4 & NY4 and Asia.
Many of these brokers don’t have sufficient IT resource or expertise in-house to manage complex networks and we are seeing a big rise in demand for our outsourced connectivity services.
One of our recent developments is our monitoring systems, which allow for detailed analytics and granular representation of trade data and flows. Understanding where bottle necks are introduced is of utmost importance when trying to negate them. We can identify when to allocate larger sizes of pipes or alternative routes to help to remove any obstructions.
A number of years ago, many infrastructure companies in North America began investing in Points of Presence to establish dedicated connections between exchanges in Russia, US and Europe. Do you think this was a worthwhile investment, or is it better to use connections that are available to all venues and datacenters, and concentrate on lowering latency?
I believe that the infrastructure companies in North America have all seen growth over the last few years. However, everyone in the market is aware that the NY4 datacentres are the key hubs in the region.
In general, across the globe, clients are becoming increasingly knowledgeable about the enhanced trade execution and operational efficiencies to be gained by focusing on connectivity solutions and, as a result, there is an increasing demand for such services worldwide.
Clients nowadays have a greater understanding about the importance of co-location and a clear view on exactly which datacenters they’d like to be in.
FXecosystem entered into a partnership with Gold-i in December last year. Talk us through the developments which have been achieved via this technology partnership
The partnership with Gold-i has proved to be very successful and productive. It’s a mutually beneficial agreement between two leading technology companies in the retail FX industry, bringing our complimentary skills together. Together we are able to help MT4 brokers with all their IT requirements – including hosted and managed IT services, with 24×7 support. It’s ideal for brokers who don’t have sufficient IT resources in-house.
To date, we’ve built a strong base of Gold-i clients who are using our connectivity services in Europe. We are looking to expand the offering into Asia over the next year.
What plans has FXecosystem got for further growth?
We are planning continued expansion in LD4 in London and will be focusing on Asia, with a presence in TY3 in Tokyo shortly. We will also be launching a new monitoring product for our clients in the Autumn. In addition to our existing FX business we will be launching new asset class for connectivity in Q4, which is a major development for us.
Although banks and brokers are much more aware of our capabilities in the market, there is still further education to be done to communicate the benefits of co-location and proximity hosting.
We have a highly experienced team, both on the institutional and retail side of the business. Our in-house expertise, combined with our investment in our infrastructure and strong track record puts us in a very strong position for significant growth over the next few years. I am very excited about the plans we have moving forward.