Barclays teams up with FXCM to launch UK retail FX platform; new model for banks’ currency offerings

By:
Peter Garnham
Published on:

Barclays has revamped its UK retail FX platform in conjunction with FXCM, one of the world’s leading online currency brokers.

Barclays Margin FX – which is offered by Barclays Stockbrokers, the UK’s largest execution-only retail broker – will provide UK clients access to live, streaming prices in 50 currency pairs, with no intervention from a dealing desk.

The front-end technology of the new platform is powered by New York-listed FXCM, which is considered the number one or two retail FX provider globally.

 
 Paul Inkster:
"Banks have not
always distributed
retail FX through
the right channel." 

Clients will also have access to Barclays own proprietary research, as well as FXCM’s research offering, which includes sentiment data, trading signals and educational video content.

Barclays Investment Bank, which came third in this year’s Euromoney FX Survey, will provide pricing to the platform – although it also gets pricing from an aggregated feed to ensure consistency and neutrality, and to cover any technical issues that might crop up. However, Barclays will provide the dominant feed.

Paul Inkster, head of product at Barclays Stockbrokers, says the main question people ask is why Barclays did not keep the whole project in-house.

"We like to work internally with our partners and leverage off their strengths, but we are quite agnostic as to who provides a particular service to us," he tells EuromoneyFXNews.

He says while Barclays Investment Bank brings strong consistent pricing, FXCM brings the know-how to engage with retail customers.

"The strength that FXCM brings is the functionality of their platform, the technology and the potential to develop the relationship when we move into mobile trading," says Inkster. "That’s what they bring to the party – FXCM have the technology and the retail friendly front-end systems."

New model

For its part, Barclays Stockbrokers, which has hundreds of thousands of equity clients, brings distribution capabilities, according to Inkster.

"It’s not suitable for all our clients, but we have a very big stock-broking business and we can handle the mass market," he says.

Inkster says Barclays Stockbrokers has the resources to cope with thousands of accounts opening over a short period.

He believes that banks have not always distributed retail FX through the right channel.

"They tried to keep it on the capital markets desk or the FX desk," says Inkster. "An FX desk that is used to dealing with hedge funds and banks and central banks suddenly gets inundated with retail enquiries, it clogs up their system. It’s just not built for it."

Inkster tells EuromoneyFXNews he has no percentage of the UK retail market in mind as a target for Barclays’ market share, but is keenly aware of the growth in retail FX, which some estimate could be worth more than $400 billion a day next year.

"We know the retail element in FX is growing and we know that our retail clients are demanding FX," he says. "Eurozone volatility, issues in the US, quantitative easing all affect currencies, and retail clients are getting more and more involved."

FXCM also welcomed the tie-up with Barclays. Drew Niv, FXCM CEO, believes the partnership will provide an offering that will be superior to anything else available in the UK.

"It is always complimentary when one of the largest and most well-established financial services providers chooses your trading technology, platform and recourses to offer it as its own."