Fewer and fewer banks can still claim to compete as full-service foreign exchange providers on a global basis.

For all the fragmentation in the FX market, the top four banks further consolidated their dominance of customer business, according to the 2013 Euromoney foreign exchange survey. As volumes rise again in FX, volatility returns and banks’ earnings from it recover, margins are still compressing. Customers are focused on cutting transaction costs. Banks face big demands on scarce IT resources.

Deutsche Bank holds on to top spot from resurgent Citi

The Euromoney Foreign Exchange survey is the most comprehensive quantitative and qualitative annual study available on the FX markets.

The bank has moved five places up the table in the overall rankings and back into the top 10 with its core client group, real-money investors. Guy Kirby, global head of FX sales at State Street, tells EuromoneyFXNews that the firm is continuing to grow its real-money franchise - and also advancing with other client segments – thanks to its focused product offering.

Citi remains the FX bank with the most wind in its sails and is now breathing down the neck of top-placed Deutsche Bank.

The Euromoney Foreign Exchange survey is the most comprehensive quantitative and qualitative annual study available on the FX markets. The FX market is an unregulated OTC market and there are no reliable, aggregated, global statistics made available against which to benchmark the survey outside the BIS studies. The survey also excludes a number of categories of market participant, which means that the total volume reported by the survey is not and not intended to be an accurate reflection of total global foreign exchange activity. Euromoney aims to capture client price-taking activity only. However, given the geographical and participant-type spread represented by the survey, Euromoney believes that the survey provides an accurate proxy for trends in the major areas of activity polled and accurately discerns the relative performance of the banks ranked, particularly over periods of two or more years.

The firm has moved up Euromoney’s FX rankings as it broadens its client base.

Every investment bank has spent huge investment dollars on FX since 2008. Now a shake out seems to be occurring. Banks with scale and budget are winning more share, but there are decent returns to be had for institutions of all sizes if they are focused.