It’s 2025 and also you attend one other overseas change business convention the place, unsurprisingly, the new matters stay acquainted: data-driven FX, streaming swaps, workflow automation, the ‘electronification’ of liquidity, debates on what AI means for our jobs, algo analysis, and totally automated commerce workflows.
You come to the workplace, solely to have a dialog with a financial institution concerning the “juniorisation” of FX gross sales desks and the merging of voice and e-sales into leaner groups masking each. It’s sufficient to make you pause – between digital trades in fact – and ask: are we heading in direction of a world the place institutional FX gross sales and buy-side buying and selling is nearly solely automated, with fewer people?
On one aspect of the argument, execution prices appear decrease than ever, and an enormous proportion of movement may be dealt with robotically or electronically. Do we actually want folks to execute small, liquid, or short-dated trades? After which algos are there for the larger trades.
More and more, merchants are anticipated to concentrate on analytics over execution. (By the way, this shift additionally appears to have decreased the variety of FX gross sales/buy-side dealer dinners in Mayfair – a maybe under-reported casualty of the fashionable period.) And should you actually should write assembly notes? Nicely, there’s at all times ChatGPT for that… though if my supervisor is studying this, I guarantee you I typed this one myself.
Handbook processes stay stubbornly embedded in most organisations – why? As a result of shoppers always request bespoke providers – and bespoke not often means ‘on the spot automation’
Alternatively, the human workload is way from disappearing. Final week alone I clocked 15 hours of conferences spanning compliance, onboarding, buying and selling, PMs, HR, reporting, threat and IT.
A fast survey of FX gross sales contacts at banks revealed they every averaged greater than 10 hours of conferences in the identical week. Many banks additionally nonetheless make use of commerce help workers to manually key in trades and deal with different operational duties – apparently FX salespeople are nonetheless valued for his or her Mayfair dinner expertise as a lot as their operational prowess.
In our personal case, 100% of frontier market trades and 50% of rising markets trades are nonetheless executed by way of voice, and day by day a commerce is rejected for some type of ‘credit score’ cause, requiring a human to troubleshoot the so-called ‘auto’ pricer. (In my expertise, this downside is commonly mysteriously resolved with the flick of a swap.)
Handbook processes stay stubbornly embedded in most organisations – why? As a result of shoppers always request bespoke providers – and bespoke not often means ‘on the spot automation’.
Whereas spreads are razor-thin and far may be executed electronically, the flexibility to function at such effectivity is itself the results of years of human effort: onboarding shoppers, understanding fund methods, operating execution high quality analyses, assembly counterparties and producing financial institution efficiency opinions.
The true worth add of people hasn’t vanished – it has merely shifted. As a substitute of being concentrated in the meanwhile of execution, it’s now front-loaded into the sooner phases of the commerce lifecycle: relationship constructing; portfolio setup; and high quality oversight and evaluation.
So no, the position of people – and of FX specialists specifically – isn’t out of date. However the job description is evolving. Maybe heads of buying and selling ought to spend much less time urgent the execute button and extra time discovering new methods so as to add worth; who is aware of, on this new period maybe that perhaps by writing FX Markets articles.
Nathan Vurgest is head of buying and selling at Document Forex Administration
