Forex ventures beyond the phone
The development of online foreign exchange trading has lagged behind e-trading of other financial products but optimists predict it will account for 70% of the market by 2004 and 95% by 2012. The advantages are obvious, so why has take-up so far been so slow?
The application of online technology to foreign exchange trading has taken a surprisingly long time to get going. One of the industry's leading players admits that the pace of innovation has been, until the last year, disappointingly slow. Only two online platforms are trading so far - the independent Currenex and State Street's Global Link FX Connect system. These will soon be joined by the new consortium sites FXall and Atriax.
Though no firm dates are yet forthcoming for when these will begin full trading, both are in final testing and are expected to go live this summer.
It may be that development of these online forex facilities has been held up by a lack of consensus among leading forex banks as to how to develop the sites and a reluctance to undertake investment. Some insiders even contend that certain of the bank members of the consortia sites have deliberately held back developments in order to buy time to perfect their own proprietary systems.