With more than a third of the worldâs largest banks and financial institutions using its systems to provide FX trading facilities to their customers, Cognotec is one of the leading suppliers of online foreign exchange systems.
A recent report from Greenwich Associates showed that 25 per cent of the worldâs corporate and financial institutions are trading FX products online, up from 17 per cent in 2001. The report breaks this down to show that one-third of financial institutions are trading online, with volumes of $2.9 trillion traded, and 22 per cent of corporates trade some $770 billion annually.
Brian Maccaba, chief executive at Cognotec, said that the companyâs results confirm this trend, reflecting increased acceptance of the technology. "The benefits of electronic delivery are now well proven, and it is significant that we have seen this growth in a year that has been difficult for the financial services industry," said Maccaba. "The predictions of growth that were being made three years ago have proven to be reasonably accurate rather than just dot-com hype."
As users have come to accept the stability and reliability of the underlying technology, they have been able to reap the benefits of online FX services. Notably, this has allowed banks and other institutions to offer their customers trading facilities using cost-effective and readily deployable systems on a white label basis that protects and enhances their existing franchise.
"In some ways, the growth in online FX trading mirrors the use of the same technologies in the travel industry," said Maccaba. "In both cases, you have an established dynamic, fast-moving international industry where customers have a need for timely information that they can act on."
Globally, Cognotecâs figures show relatively stable and uniform growth (see table) with the exception of Japan, which has grown by 405 per cent year-on-year. "Japan was starting from a low base that reflects the structure of the banking industry there so the figures reflect a catch-up period," said Maccaba. "But they also show how the industry is changing there as they use the technology to increase their traditionally close ties with customers while at the same time extending their reach geographically."