According to a recent survey, cloud technology is expected to account for the majority of trading in the $6.6 trillion-per-day foreign exchange (FX) markets over the next five years. Stable and cost-effective cloud-based applications are likely to be widely adopted by top executives and senior managers in forex trading at banks and buy-side institutions. Companies are increasingly using cloud technology to make data storage more cost-effective, centralized, and reliable, in contrast to the traditional on-premise systems.

The COVID-19 pandemic has accelerated this trend. Making remote trading safe and efficient has become one of the most challenging workflow problems. Estimates suggest that 28% of forex dealers plan to run their FX technology entirely in the cloud over the next five years, while 41% would adopt a hybrid approach combining cloud and on-premise systems. This growth in cloud adoption is expected to trigger a complete tech refresh in forex trading as organizations aim to implement modern solutions to stay competitive.

Trends in Trading Networks

Compared to other trading networks, multi-dealer platforms are projected to see the highest growth in the next 12 months. API trading is becoming increasingly popular due to a shift toward relationship trading. This trend reflects organizations’ growing preference for outsourced forex technology, which allows them greater control over brand and delivery technology while reducing operating costs. Lower technology costs, easy integration, automation, customization, and accessibility for dispersed teams are key drivers for the transition to cloud-based trading systems.

Cloud’s Impact on Forex Trading

The past year has demonstrated that technology is critical to the future of forex trading. Cloud computing is expected to be an integral part of nearly every organization’s workflow in the coming five years. Increased cloud adoption will enable market participants of all sizes to execute FX functions more efficiently and cost-effectively on a daily basis.

With the globalization of forex players, there has been a rise in fraudulent attempts to impersonate trading platforms. This highlights the need for secure cloud technology that proactively ensures safe operations with minimal manual intervention.

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