LONDON Jan 11 The share of Britain's biggest
banks in the market supplying UK companies' daily foreign
currency needs fell for a second year running in 2016 as firms
made more use of new trading platforms and brokers, an industry
report showed on Wednesday.
Banking researchers East and Partners surveyed more than
2,000 small, medium and large British firms and found falls in
both the volume of business done with banks and the number of
companies using them as a primary provider.
Barclays, HSBC and Lloyds
remained the top three providers of currencies to
companies, but all lost market share, to 14.3 percent, 13.5
percent and 10.6 percent respectively.
Most other banks also saw declines. The only mainstream
lenders gaining share were ING, Bank of America Merrill Lynch
and Bank of China.
The biggest non-bank provider was U.S. group Western Union,
rising to 3.4 percent from 3.0 percent, followed by Monex, CMC,
IG Markets, Saxo Bank and American Express. Small boutique
providers doubled their share to 3.8 percent.
"High Street banks continue to hold more than half the
market but at best saw no growth or decline in their share,"
East and Partners' head of client servicing Simon Kleine said.
"There is a lot more shopping around, and we can see the
effects both in terms of market and wallet share. Some
international banks have seen small increases in share and
there's been a resurgence in growth by many non-bank providers."
By offering companies currency at much tighter spreads
between buy and sell prices than the rates banks give each other
and their biggest clients, brokers have been instrumental in
making forex trading as a whole more competitive.
The biggest brokers say they have grown strongly by
providing more consumer-friendly software for firms to use or by
watching over the currency needs of company managers too busy to
notice that, say, the dollar has hit levels where they would
like, or need, to buy or sell.
That has made millions for a generation of forex
entrepreneurs but has also begun to draw a response from banks.
A number have tightened the spreads offered on ordinary
corporate transfers and some, such as German lender Deutsche
Bank, have invested in new client service centres in
cheaper locations outside London.
($1 = 0.6987 British Pounds)
(Reporting by Patrick Graham; Editing by Ruth Pitchford)