Forex white labelling is becoming increasingly prevalent but there is still confusion about what the term means.
Any bank with good client trading technology, and there are plenty of those, can give a market-taking bank, let’s call it XYZ Bank, a click-to-deal screen with executable streaming rates in a range of currency pairs. Then XYZ Bank’s sales people talk to their end clients on the phone but enter tickets into the dealer bank’s screen, adding whatever margin the sales person wants for that particular client.
That is pretty straightforward, and the top two or three dealers in this area have several hundred bank clients using that kind of service. But it is not full white labelling. XYZ Bank cannot use it to offer its own clients electronic execution, for example. Competition between the big banks becomes really interesting in this area only when they offer completely integrated electronic forex services to XYZ Bank so that it in turn can offer electronic execution to its clients. These sorts of full partnerships are rare – even the biggest banks in this area cannot boast more than around 10 client banks in any region.
For fully integrated forex white labelling, Citigroup and Deutsche Bank clearly stand out with the best offerings.