Citigroup culls third party Forex platforms

Forex giant reduces number of third-party aggregators by two-thirds

Citigroup, the third largest dealer in the $6.6bn-a-day foreign-exchange market, has announced that it is to significantly curtail the number of places where it competes with its rivals to win Forex business.

According to the FT the bank is set to reduce the number of systems it uses to connect with customers by two-thirds from 45 to 15 by the first quarter of 2020. The cull will mainly be of smaller platforms and it is a move that industry insiders calculate could save the bank up to $5m-$10m per year.

It could be that Citi’s initiative is part of a growing trend of banks taking back control, relying less on third parties to attract new customers.

Many Forex traders use platforms such as FXall and 360T so they can see the various banks’ prices in one place. Yet as an insider told the FT, “In the grand scheme of things, the smaller platforms add very little value but a lot of cost, effort and energy goes into maintaining a presence on them.”

Citi is the first major Forex dealer to remove third-party aggregators in this way and it will be interesting to see how its rivals respond.

“You may see other providers following, especially when the big Forex players aren’t making much money in Forex any more,” Nick Twidale, Sydney-based director and co-founder of X-Chainge, which provides foreign exchange-related technologies, told Bloomberg.

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