Greenwich Associates: Top banks still dominate Forex market but ceding share

Greenwich Associates, a leading provider of global market intelligence and advisory services to the financial services industry today published a report on the latest Forex market structure disruption taking place within the industry. Greenwich clients include nearly all of the world’s leading investment banks, commercial banks and asset managers.

The top five Forex dealers in descending order are Citigroup Inc., Deutsche Bank AG, UBS Group AG, Barclays Plc, JPMorgan Chase & Co. which reported to have completed 51% of client trading volume in 2014, down from 53% in 2013, the Stamford, Connecticut-based research company said in the report based on in-person interviews with 1,612 top-tier users of FX at large corporations.

The Greenwich report stated:

Nevertheless, the market structure disruption that is upon us, combined with an increasingly volatile currency market, is making room for the rest of the top 10 to wrestle away share slowly but surely—both on the screen and on the phone.
In an evolution similar to Amazon’s, multidealer platforms will increasingly become the primary place to transact.

Last year we saw ICAP, a leading markets operator transition further resources into it’s e-broking business, shrinking the size of it’s voice dealing department faster than expected in order to better compete. It was revealed in the report that the top banks’ market share in e-trading is 45% higher than their percentage in the voice-only market. The three dealers that follow have a voice-market share 5% greater than their e-trading business, which goes to show the importance of having attractive electronic trading platforms which are powerful and easy to use.

Methodology of Greenwich Survery

Between September and November of 2014, Greenwich Associates conducted in-person interviews with 1,612 top-tier users of foreign exchange at large corporations and financial institutions in North America, Latin America, Europe, Asia, Australia, and Japan.

To be considered top-tier, a firm must meet one of the following criteria: be a fund manager, hedge fund, central bank, retail aggregator, Fortune Global 500 firm, or treasury center; or have reported trading volume of more than $10 billion; or have sales of more than $5 billion.

To request the report from Greenwich, click here.

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