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financial markets are not part of this new world will be mistaken,” says Basiuk. “It is a slow process. But in the next 18 months I think we will see a huge shift in the way banks interact with their clients and do business.”
Linkages
Banks and FX institutions are awakening to the new possibilities offered by technology which links market participants together. For example, Equinix, the global data center specialists, in October this year launched “marketplace”, a networking service which enables more than 4,000 firms based within its network of data centers to forge connections with each other. Each member can create a “profile and store front” – similar to those which exist on business social networks – enabling them to sell services and reach out to potential partners in the Equinix data centre ecosystem.
By mimicking aspects of business social networks such as Linkedin and Xing, Equinix is striving to facilitate more collaboration between its customer base. Te specialist data centre provider is aiming to use the marketplace service to boost interconnections between its customers, which rose by 27 per cent in 2010.
Te migration of a data center network from “warehouses for storing large amounts of information” to an ecosystem in which market participants use social network tools to interact demonstrates how the financial markets are evolving in a world where social media is increasingly becoming a part of more peoples’ lives.
Given the traditionally conservative nature of high finance, the rapid rise of social media has been greeted by caution and resistance in some quarters of the industry. But some banks and major FX institutions are embracing social media as a new way to interact with clients and as a public relations tool.
In fact social media tools already had a place in the FX markets, pre-web2.0. Ralitza Fortunova, executive director, FX electronic markets sales at Nomura in New York, points out that the messaging chat function on the Reuters dealing screen has been used as a communication tool by FX market participants for several decades.
“Te definition of a social network is essentially a network that is made up of people and organisations that are connected by a specific interdependency. Institutional FX players already participate in two well- established networks, Reuters and Bloomberg. Tese are networks that we are all doing business through right now,” says Fortunova. “Both maintain directories of participants, their characteristics and facilitate connections based on some kind of common interest, acting as a channel for disseminating information distributing research and communicating trade ideas.”
New challengers Stefan Basiuk
“It is a slow process. But in the next 18 months I think we will see a huge shift in the way banks interact with their clients and do business.”
However, Fortunova argues that the hegemony of these established networks will likely be challenged by other FX market participants as they are able to exploit the new possibilities offered by internet-based technologies in enhancing the ability to communicate more efficiently with clients. “Te platforms that will pose the challenge will not be just FX platforms per se, but portals like NomuraNow, which encompass a cross-asset approach and touch more parts of the trade cycle. Te key to the new approach is to allow our clients’ experience to be enriched in a way that has not been possible in the past and is aligned with Nomura’s vision of a single point of access to our client tools,” says Fortunova.
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