Through the breadth of its market liquidity, product scale and global footprint, UBS has built a strong reputation as the partner of choice for its institutional, retail, corporate and wealth management client base. Most recently, UBS has been evolving its FX trading platform based on four key principles: agility, resilience, scalability and comprehensiveness. The result of this sustained focus has been the development of new trading capabilities, such as market-making on firm trading venues and developing access to streaming swap liquidity. UBS has also invested heavily in pre- and post-trade analytics to deliver market insights and improve execution outcomes for clients as part of its ‘FX Engine Room’ offering of sales and analytical toolkits. As of 2024, across the bank’s various FX businesses, it daily trades over $125 billion electronically with more than 2,500 clients across the globe.
The recent acquisition of Credit Suisse required taking on significant operational and human capital redeployment to support the integration. While maintaining reliability and competitive liquidity in challenging markets, the acquisition also expanded UBS’s offerings, increased liquidity, and enhanced trading limits for key clients to address the market gap left by Credit Suisse. The integration with Credit Suisse has expanded UBS's footprint, particularly in wealth management and commercial lending, and its precious metals offerings, particularly in palladium group metals.
During the review period, five substantial initiatives UBS rolled out included its redesigned platform interface to accommodate diverse client needs and pricing, an enhanced smart-entry system that converts text to FX option structures, learning from user inputs, and added CME block trade capabilities with single-dealer platform recognition of Bloomberg codes for exchange traded derivatives, improving price discovery and reducing the risk of errors. Additionally, UBS improved processes for performing unwinds and booking restructures, introduced advanced analytics for multi-currency products that enabled ad hoc correlation and cheapness analysis for strategic decision-making, and supported algorithmic pricing and seamless execution for externally securitized products.
Looking at UBS’s April e-FX year-on-year data, UBS’s average daily volumes grew by nearly 16%. UBS is now fully leveraging its investments into its offering, which has translated into a 40% volume increase in the first half of 2024, compared to the same period in 2023.
Our ambition is for UBS’s branding in FX to be synonymous with consistency
In options, UBS hasn’t dropped below the number two ranking since 2023, showing consistency across various market conditions. It made significant investment in the NeoFX Options product, including transitioning from a traditional quote and price model to a comprehensive, service-oriented platform, offering pre-execution tools and electronic pricing dissemination, which allows UBS to show competitive pricing across products while efficiently recycling out risk across various client segments. While the FX options market is still broadly manual, UBS automates pricing for at least 90% of its clients’ options requests.
Looking at just some of the product enhancements UBS has made over the past year, the bank has expanded its algo offering to improve execution outcomes, making pre-trade transaction cost analysis (TCA) available on the FX algo ticket and enabling post-trade TCA reports for principal and agency FX products, which are benchmarked by UBS and third-party providers. UBS also deployed AI and machine learning on its request-for-quote platforms, leading to real-time pricing improvements for client quote enquiries.
Additionally, UBS created new client efficiencies through increased post-trade self-service for FX cash, allowing clients to manage trades independently, increasing flexibility and convenience. UBS also enhanced its proprietary straight-through processing (STP) solution, which now supports external STP solutions, while clients can set up alerts to receive emails on tailored trade events, including order fills, price reached, etc. Finally, UBS launched UBS Neo STIR FX tools covering G10 and emerging market currencies, creating a new way to engage with clients trading in FX swaps by enabling them to access a range of STIR markets analytics tools.
Eric Li, global head of FX trading, says: “Our ambition is for UBS’s branding in FX to be synonymous with consistency. To be recognised in as many categories as we have been suggests that we are making progress towards realising that ambition, and to be recognised as the world’s best FX bank is the icing on the cake.”