To examine institutional trading firms’ approach to FX infrastructure investment, Acuiti recently partnered with Avelacom to survey or interview senior executives from 68 proprietary trading firms, brokers and banks that trade FX. Survey respondents were based in Europe, US, APAC, MEA and LatAM. The results were published in a whitepaper which examined the state of play in FX and where firms envisage the greatest challenges. It also explored how they are approaching connectivity and how recent innovation such as stablecoins and FX ETFs might affect market dynamics in the future.
Key findings from the survey found that:
- 82% of survey respondents expect spot FX trading volumes to increase over the next 12 months.
- 51% of survey respondents anticipate that AI and ML will drive the market’s greatest technological advancements over the next three years. This is a higher level of enthusiasm than was shown for other technological opportunities, such as automation, blockchain settlement and cloud computing. However, there is still caution in the application of AI technology. This was most often caused by high costs of implementation and a burst of third party offerings that it can be difficult to differentiate between.
- High operational costs and liquidity concerns are common problems for market participants.
- While cloud adoption for infrastructure is relatively low, it is growing in popularity as firms invest in connectivity and look to improve their processing power and scalability.
- Over a quarter of firms that currently rely on third party platforms for liquidity sourcing are planning to take more control of connectivity and establish more direct access to venues, bypassing brokerage-led execution.
- Most survey respondents set up their infrastructure three or more years ago, with 29% having done so more than five years ago — suggesting that the market is ready for a new wave of investment in the area.
New technology
FX is already a highly mature market in terms of electronification. However, the need to innovate and adopt efficiency-enhancing technologies is still high. When considering which technological advancements would have the greatest impact on FX markets in the coming three years, survey respondents placed highest importance on artificial intelligence and machine learning in non-trading operations. When asked more specifically about the technology’s potential for FX trading in the future, most survey respondents thought the impact would be significant and nearly one fifth said it would be game changing.
Expectations for algorithmic trading
Data analytics and visualization tools have also been increasing in importance in recent years, particularly in light of best execution requirements. Buy-side demand for tools like TCA have
increased rapidly in the wake of new rules and growing client demand for transparency. These tools support granular analysis of the costs of each trade and enable comparison of the sell- side firms that they have relationships with. It should also be noted that expectations of innovation in algorithmic trading are also high amongst survey respondents continuing a trend of heavy investment in this area in recent years.
AI and machine learning are poised to significantly change FX trading, with 51% of respondents identifying these technologies as the most impactful over the next three years. From enhancing data analytics to improving algorithmic trading, these innovations will be key to maintaining a competitive edge in an increasingly fragmented and complex market.
More information about the survey can be found at:
https://www.acuiti.io/wp content/uploads/2025/05/FX-Trading-in-2025.pdf
