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the computer decides when to buy or sell, so the simple calculation of scale by the number of traders connected to the FX markets doesn’t happen anymore. You have a couple of computers making decisions that could give you 100,000 transactions and tomorrow just five transactions from them.”


Te turf war Grant asserts has been building in the EMEA FX market involves not only those large banks trying to claim dominance, but also as a consequence high street non-bank FX players, which is adding to existing connectivity challenges.


Paul Kennedy


“If I have got an enormous quantity of bid-ask trading data how do I, as a human, make sense of that? Visualisation demonstrates that a picture


can be worth a thousand words, it allows us to make sense of the numbers in the sense of where the market is going and what is affecting it.”


As a technology issue, Kennedy notes that business and traders can be oblivious to the ‘plumbing’ around big data, and do not tend to care about the solutions used, as long as they can make a successful trade. From the perspective of management it is often a question of whether the firm is being competitive and secure with well controlled costs.


Grant says that market conditions are driving up the number of FX transactions, creating the need for big data technology. “A number of the larger tier one banks are trying to dominate the flow of the FX environment to shore up revenues, because FX is relatively stable, regardless of what happens in other asset classes,” he said. “Te margins that banks earn in FX are slimmer that those in other asset classes. So they need that increase in flow to improve revenue and profit. Tat’s where big data comes in, with costs associated with handling and processing of data.”


“Te driver is transaction volume,” agrees Ralf Behnstedt, managing partner of consultancy FX Architects. “Te algorithmic trading approach means


74 | july 2012 e-FOREX


“Most organisations now regularly look at 50-60 feeds, which in EMEA is greater than if you were looking at the equity environment,” he said. “In addition to the connectivity issues, they are now in a latency war. Some are reducing their latency in terms of their market making capabilities; how long it takes them to generate a price. I’ve heard of firms trying reduce price generation from 100 milliseconds to sub-10 milliseconds. When you think of the volume of prices going out to the market, that’s significant.”


Stuart Grant


“Te margins that banks earn in FX are slimmer that those in other asset classes. So they need that increase in flow to improve revenue and profit. Tat’s where big data comes in, with costs associated with handling and processing of data.”


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