Citi to slash foreign exchange platforms by two-thirds: FT

Singapore

CITIGROUP Inc plans to cut the number of foreign exchange platforms it supports by two-thirds, the Financial Times reported, citing people with knowledge of the matter.

The multinational investment bank wants to reduce the number of platforms used to connect with customers to 15 from 45 by the first quarter of 2020, the newspaper said. Citigroup has sent a survey to all the providers, the FT said.

The move may save Citi US$5 million to US$10 million a year from cutting links to third-party platforms that offer competing bids from other banks, the newspaper reported. Citi-group spokeswoman Shirley Lam declined to comment.

Citigroup and JPMorgan Chase & Co are the two biggest foreign exchange traders by market share due to their technology and client networks, according to a 2018 study by Greenwich Associates. With currency volatility having slumped over the past decade, banks have invested heavily in electronic trading to reduce costs.

"For every connection you make, you need connectivity to make sure the latency of pricing isn't ham-pered," said Wong Joo Seng, chief executive officer of Singapore-based currency platform provider Spark Systems Pte. "The banks, I think, will have to rationalise the number of platforms they're plugged into. FX isn't really a growing pie after all."

Currency trading platforms are provided by companies including Saxo Bank and CMC Markets Plc. Bloomberg LP, the parent of Bloom-berg News, operates FXGO.

"You may see other providers following, especially when the big FX players aren't making much money in FX any more," said Nick Twidale, Sydney-based director and co-founder of X-Chainge, which provides foreign exchange-related technologies. BLOOMBERG