More than one quarter of buyside traders in the US and UK are using tools for transaction cost analysis in foreign exchange, which is now a major input to execution strategies according to consultancy Greenwich Associates.

Kevin McPartland, head of research for the market structure and technology practice at Greenwich Associates, said in a report that increasing efficiency on the desk is currently the biggest focus for head traders and nearly half of buyside foreign exchange desks now use vendor-provided order management systems.

“Over one-quarter in the US and UK are using FX transaction cost analysis tools, whose output is now a major input to execution strategies,” added McPartland. “And the growth of multi-product trading continues to climb, with nearly 60% of FX spot traders also trading derivatives.”

He expects the trend toward smarter, more automated trading to continue. The consultancy interviewed 78 buyside traders across the globe trading foreign exchange between June and August last year.

Consultancy Oliver Wyman and Morgan Stanley Research said in a report last week that best-in-class technology and data analytics have opened the door for new competition and non-bank liquidity providers have carved out a major role in FX, cash equities and listed derivatives.

“We estimate $2bn to $3bn of further revenues are potentially in play for these models as they expand their offering,” said the report. “There is a case for smaller banks to consider outsourcing FX market-making.”

There have been concerns that global foreign exchange volumes will be affected by the industry’s new code of conduct. The Bank for International Settlements began pushing for a harmonised global code of conduct for the FX market in 2015 following regulators imposing fines for price rigging which led to banks including Barclays, Royal Bank of Scotland, Citigroup and JP Morgan paying more than £6.3bn in penalties and dozens of traders being suspended or fired.

The first part of the new code for the wholesale market was released in May 2016 and the second part is slated for May this year. The first phase of the code covered areas such as ethics, information sharing, aspects of execution and confirmation and settlement. The second will cover further aspects of execution including e-trading and platforms, prime brokerage, as well as governance, and risk management and compliance.

Last week Guy Debelle, deputy governor of the Reserve Bank of Australia, said in a speech to the TradeTech FX Asia Conference that the code is on track to be released in two months’ time.

“As I have stated before, the FX industry has been suffering from a lack of trust in its functioning, said Debelle. “This lack of trust is evident both between participants in the market and, at least as importantly, between the public and the market.”

He continued that all parts of the market have been involved in drafting the rules so there will be a single voluntary code for the whole industry globally rather than the existing codes used in different regions.

“This is not a code for just the sellside,” Debelle added. “It is there for the sellside, the buyside, non-bank participants and the platforms; its breadth is both across the globe and across the whole structure of the industry.”