FX is at the greatest inflection point since Nixon decoupled the dollar from gold in 1971. Foreign exchange (FX), and its technology demands, are going through a series of evolutions and revolutions.

The COVID-19-induced episodic volatility pushed many systems beyond their red lines. In FX trading, the core interaction between liquidity takers and makers is moving rapidly to a “Show me the data” model of interaction, with ever-increasing expectations in the type of data and analytics expected between counterparties. Business and trading changes drive technology needs.

Technology and data changes drive business and trading changes. Celent has seen a new wave of investment, with new levels of sophistication in the front-to-back FX platform of today.

The FX market is going through structural and secular shifts and absorbing regulatory and capital changes that have shifted trading volumes. We are at a point where a highly fragmented market is looking for solutions to solve liquidity sourcing, trade execution, and fair access to markets.

In this report, we briefly explore major changes across the spectrum of FX and then focus on trading and execution. This report focuses on the state of foreign exchange (FX) market and technology trends, with an eye toward where the market is heading.

The FX technology solution provider landscape is as large and varied as the asset class served.