Has Westpac introduced any recent enhancements to the existing FX algo suite?
Our FX distribution strategy is firmly client-led – we believe that ‘clients have products’ and not ‘products have clients’. Among our most recent enhancements was the launch of auto rolls on selected channels to simplify forward execution and greater inflight flexibility, allowing clients to dynamically adjust execution parameters during the trade. Importantly, the auto roll functionality was developed in direct collaboration with one of our largest and most sophisticated algo clients, reflecting both the strength of our client relationships and our ability to respond quickly to complex execution needs.
In addition, our FX API now also supports electronic benchmark orders, giving clients streamlined access to the WMR Fix via a secure, automated execution process.
The service is live and rolling out across key platforms. These two key enhancements sit firmly alongside our broader focus of boosting internalisation, knowing that clients increasingly come to us for unique liquidity access – particularly during time zones such as the Asia open when liquidity can be particularly stretched.
Were there any key factors behind those new additions?
The drivers behind these recent developments were two-fold. Firstly, direct client feedback included requests for even more flexibility and automation to better manage execution risk, especially in forwards and swaps. And secondly from insights shared by our own trading desks, where we increasingly see the importance of internal liquidity, execution adaptability, and the value in minimising market footprint, particularly during thinner liquidity sessions.
Our collaboration with a major algo client around developing the new auto rolls offering further reinforced the message that our leading clients value more efficient, scalable forward execution solutions which integrate seamlessly with their own execution engines.
What are the unique benefits offered by Westpac’s franchise and suite of algos?
We were the first Australian bank to offer in-house built algorithmic execution to clients in 2016, combining innovation with deep local expertise.
Our client-first approach ensures we offer only the strategies we trust for our own trading, with proprietary designs focused on optimising execution quality and managing market impact. Supported by our regional insight and continuous innovation, we deliver consistently strong outcomes aligned to our clients’ evolving needs.
What is behind the continued increase in the uptake of FX algos?
Several factors are driving the broader adoption of FX algos, including a greater focus on execution quality, transparency, and control across a broader range of flow sizes. Furthermore, trust in electronic execution outcomes has increased significantly, underpinned by better liquidity access and the availability of smarter, next-gen style algos.
Our ability to collaborate closely with sophisticated clients, such as with the recent auto roll development, also gives clients confidence that we are building tools which directly align with their evolving execution needs. FX algo clients increasingly recognise that partnering with a provider who offers genuine internal liquidity – particularly during less liquid times – makes a meaningful difference, both in reducing market impact and improving overall trading performance.
Are you seeing any change in the sizes of the orders now being executed using algos? What is influencing this shift in uptake?
Originally, algos were predominantly used for very large, sensitive orders; now we’re seeing broader adoption across a wider range of ticket sizes. Clients also increasingly recognise that market impact matters across all flows – not just very large tickets – particularly in thinner liquidity sessions. Improved inflight flexibility and smarter liquidity access through internalisation continue to further support the uptake of algos for both strategic and tactical execution. Notably clients are also far more data hungry than in the early days of algo use – they are analysing execution quality more rigorously through TCA and, as a result, expect stronger outcomes across all trade sizes, not just in flagship transactions. This data-driven mindset is pushing greater adoption of algos even for mid-sized and smaller flows, where consistent performance still matters.
On the back of this growing demand for analytics and improved TCA, how do you support clients to understand and utilise this data effectively?
Our clients are becoming increasingly sophisticated in their use of data and now expect not just post-trade summaries but deep, granular insights that can drive real-time decision making. We work closely with clients to interpret their TCA results meaningfully, providing context around liquidity conditions, execution style, and market behaviour – particularly during challenging periods such as the Asia open.
They also increasingly want to analyse market impact, slippage, fill quality, and liquidity characteristics across all execution sizes, not just the largest orders. Our goal is to turn analytics into actionable strategy improvements, helping clients to continuously refine their execution approach, rather than treating TCA as a static compliance exercise.
To what extent are clients looking to partner with you on developing bespoke algos or being able to change parameters?
Collaboration is very much on the rise. Clients turn to our algos for the ability to fine-tune their execution dynamically – adjusting aggression, slicing style, and interaction with liquidity without cancelling and resubmitting.
Our development of the auto roll feature in collaboration with a very large and sophisticated client is a great example – they came to us with a challenge, and we worked together to deliver a scalable solution. We believe close, practical collaboration leads to better outcomes, both for the client and for us.
How does Westpac support clients in being able to overcome challenging liquidity conditions while reducing market impact?
Deep internal liquidity access is a major differentiator via our unique franchise. Our uniquely strong internalisation levels help clients achieve better execution outcomes with a lower market footprint, which is especially important during sessions where liquidity is typically stretched, such as the Asia open.
Our deep understanding of regional liquidity dynamics further allows us to support clients with tailored execution strategies that recognise when and where liquidity is genuinely available. Clients are also then able to benefit from reduced signalling risk and more consistent pricing, helping them manage execution risk more effectively in challenging conditions.
Have you seen any increase in interest for liquidity customisation?
We are seeing more clients seeking different types of liquidity for different situations. Our offering is designed to take advantage of a range of liquidity providers as well as internal liquidity.
We also continue to ensure there is a balance between price and market impact to achieve the best outcomes for each of our clients.
How will the FX algo market continue to evolve? What will be the ongoing focus for Westpac?
The FX algo market will continue to evolve towards greater real-time flexibility, smarter liquidity access, and deeper client customisation. Clients increasingly expect full in-flight control, greater liquidity transparency, and deeper analytics across all trade sizes.
We expect that demand for data will also continue to rise, and AI and machine learning will begin to play a bigger role in optimising liquidity selection and execution strategies in real time. Westpac’s ongoing focus will be to evolve alongside these trends while maintaining a client-centric, transparent approach, ensuring that innovation always supports better outcomes for our clients.
