Foreign exchange markets are undergoing substantial change, driven by rising market volatility, the evolving settlement landscape, and advancements in AI. Speaking to Trader TV at this year’s TradeTech FX in Miami, Marc Natale, global head of sales engineering and marketing at Murex, discusses the key forces reshaping FX trading, the accelerated emphasis on speed of execution and real-time data, and the future of the FX desk
Interview
Terry Flanagan – Marc, as I said, we’re here at Trade Tech FX. It’s all about helping buy side market participants help trade foreign exchange more efficiently. To set the scene, what do you see as the key market forces shaping the FX landscape today?
Marc Natale – Well, FX today is being reshaped by two fundamental forces. One is speed, the other one is the settlement infrastructure. Speed first. Volatility is driven by rates differential. By different monetary policies between the Fed (US Federal Reserve), the ECB (European Central Bank), Bank of Japan. But as well, from geopolitics. We all saw that last year, shortly after the Liberation Day tariff announcement, a client’s FX volume increased 100%, reaching a million trades a day. Human workflows are not built to absorb such a shock. Then you have the settlement infrastructure, where central banks and the FX global code are pushing for the wider adoption of PVP (payment versus payment) mechanism, paving the way for stablecoins and for tokenized elements to become de facto the shadow CLS (continuous-linked settlement) for emerging market currencies. Now, if your architecture is not designed to scale in volumes and in asset classes, the operational pain is real.
Terry Flanagan – Earlier today, Trade Tech FX, you spoke on a panel about end-to-end workflow automation. What were the key takeaways from that panel?
Marc Natale – Well, the key takeaways were probably threefold. One is, don’t think about automation only from the execution angle. Second is, as you look at your FX architecture, ask about requirements beyond the FX desk, ask other trading desks. And third, replatforming FX is complicated. You should ask for guidance and advice from peer groups.
Terry Flanagan – Technology is a big theme of the conference. Where are you seeing most meaningful impact from advances in technology and data, particularly in AI and digital assets?
Marc Natale – Well, I wouldn’t say that FX is being disrupted by technology, but it’s certainly being amplified by it, driven by AI, indeed, and the digital assets evolution. If you look at algo trading in particular, it’s arguably the only scalable answer to the speed we see in the FX markets. And AI is really driving it. It’s being used for liquidity forecasting, for pricing, for real-time, deep hedging, and skew modelling. At Murex, we use a neural network replication to make it faster to do pricing of complex derivatives. We reached 1500% gain in pricing auto-callable on CPUs, making GPUs very irrelevant in that case. Now, at the same time, you have digital assets that are becoming more ubiquitous, moving from pilots to production environments with plenty of tokenized assets settling at T+1 or even T+0 on CBDC rails, while many firms keep their risk and their accounting on their traditional finance. So what we do believe at Murex essentially is unifying AI, real-time risk, and modern installments.
Terry Flanagan – Now, often at these conferences, there’s a panel or discussion of some sort about the future of the trading desk. This is an FX conference. What would you say are going to be the hallmarks? What’s important looking ahead to the future of the FX trading desk?
Marc Natale – I think you can label it with intelligence at scale, in a way where you will have a human workforce mostly focusing on guardrails, mandates, key relationships, while platforms take care of pretty much everything else. Automation will keep increasing, removing low-value, friction, like reconciliation, will be mostly driven by models more than platforms and teams around them. And our markets is also evolving towards continuous markets. So, although 24/7 institutional FX is not for tomorrow, you have a number of business processes that are real-time already, collateral management, liquidity forecasting, and cash management. But a lot of legacy systems are already struggling to do that, and none of them are ready for zero downtime. Now, if I’m trying to be optimistic, what’s exciting is that the SaaS (software as a service) delivery mechanism and the compute efficiency will make it possible for a wide range of firms to benefit from advanced analytics, not only the top 10 players.
Terry Flanagan – Okay, Marc, thank you very much for your time. Enjoy the rest of the conference.
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