Internet banking reaches forex. (E-Commerce News and Products).

The ongoing revolution in the foreign exchange (forex) market confirms the pervasive effect of Internet technology on banking. According to IDC 2000 was a turning point for the foreign exchange market as it saw faster implementation of Internet technologies.

Efforts by banks to use the Internet to reach additional customers, automate back-office processes, increase system integration, and improve risk management are driving the revolution. The forex market has up to now been one of the most conservative areas of banking, with banks still trading with customers by phone or proprietary trading systems. The lack of a real-time competitive market has created inefficiency in the buy side of the business, resulting in higher costs for bank customes.

The launch of Currenex, an independent non-banking forex emarketplace offering multibank dealing systems to customers, has encouraged banks to create their own emarketplaces. FxAll and Atriax, two of the first forex emarketplaces created by banks, are expected to go live in 2001. Despite the expected reduction in profits due to increased competition, the overall impact of the Internet revolution on the forex market will be positive because banks will achieve benefits such as cost cutting, improved risk-management capabilities, and an increased customer base.

www.idc.com