Talk is that the bank has done a deal with Denmark’s Saxo Bank, one of most familiar names in the sector, to provide the technology for its platform.
The rumoured partnership seems similar to the deals struck between Deutsche and FXCM, and ABN Amro and UBS, who got together with Oanda. However, unlike those deals, it is not believed to be a flow arrangement; the bulk of the liquidity on the platform will come from Citi.
Citi’s entrance into retail, if confirmed, serves to underline the sector’s increasing importance, especially to the volume players. The decision by the big banks to get involved will certainly be welcomed by regulators. In the US specifically, the FX retail industry has attracted some extremely troubled operators, much to the concern of the National Futures Association. The fact that more reputable and larger organisations are extending their services will surely lead to a radical reshaping of the sector. Ultimately, many of the smaller platforms may be forced into becoming technology rather than price providers.
23 November 2007