Outlook for e-FX: opportunities and risks for banks

As electronification spreads into new areas of foreign exchange trading, banks are under pressure to digitise more of their offerings to remain competitive. The race is now on to automate pricing, trading and hedging in areas such as non-deliverable forwards, swaps and options. This not only augments services to clients, but hugely increases operational efficiency and risk management for the bank. At the same time, banks are keen to take advantage of technological advances, such as cloud computing and artificial intelligence, which allow them to harness a mass of new electronic data and create powerful insights and decision-making tools. While this new digital world undoubtedly brings opportunities, it also creates legacy systems and other operational challenges and risks.