Foreign exchange vendors are under increasing pressure to adapt to rising institutional expectations or risk fading into obsolescence, according to Citi’s fifth annual FX Vendor Review.
The report, based on client feedback and vendor performance assessments, reveals that while overall satisfaction is high, the demand for innovation in execution tools, integration, and regulatory compliance is intensifying.
Clients Demand Better Integration and Smarter Execution
Citi’s latest findings highlight a pivotal shift in the foreign exchange vendor landscape.
Despite a 90% satisfaction rate among clients, 85% of respondents emphasized that vendors need to improve, particularly in workflow integration and execution capabilities.
The survey suggests that institutional clients no longer see FX vendors solely as service providers, but as essential infrastructure partners embedded within their operations.
As the boundaries between client systems and vendor platforms blur, firms are expected to deliver more intelligent, efficient, and compliant services that meet evolving industry standards.
Execution management is no longer just about transaction speed—clients increasingly demand streamlined processes that enhance operational efficiency.
According to Ayesa Latif, Citi’s Global Head of Foreign Exchange Products, the bank’s strategic objective is clear.
“Our ultimate goal is to enhance connectivity, expand product offerings, bolster stability, and improve overall market operations to further benefit our clients, liquidity providers, and all other market participants,” she said.
Vendor Switching Slows but Expectations Climb
One of the standout findings in this year’s review is the sharp decline in vendor switching activity.
In 2021, 51% of clients reported changing FX vendors.
By 2025, that number has dropped to 22%.
While this indicates growing stability in vendor relationships, it does not imply that clients are satisfied with the status quo.
Citi interprets the reduced switching rate as a sign that clients prefer to deepen ties with existing vendors rather than start over with new providers.
This loyalty, however, is contingent on continuous improvement.
Clients are prioritizing enhanced execution, tighter integration with internal workflows, and more robust regulatory support.
In this context, FX vendors are expected to move beyond traditional execution roles and offer more holistic services that integrate seamlessly with client infrastructure.
The industry’s future will likely belong to those who can meet this demand for deeper functionality and real-time adaptability.
Cost Pressures and Regulatory Challenges Loom
While vendors are being pushed to modernize, many face internal and external barriers.
Citi’s report highlights rising infrastructure costs and increasing regulatory requirements as major obstacles to innovation.
These challenges are forcing many vendors to choose between long-term product development and short-term revenue retention.
Such trade-offs pose a risk not just to vendor profitability, but to client retention.
If vendors fail to invest in next-generation technologies, they risk falling behind as client expectations evolve and digital transformation accelerates.
The review warns that vendors who fail to keep pace may see their market share eroded by more nimble competitors capable of scaling within constrained budgets while maintaining regulatory compliance.
Review Methodology and Industry Outlook
Citi’s FX Vendor Review assesses vendors across nine categories, including cost efficiency, platform functionality, governance practices, and customer service.
It also incorporates client sentiment regarding the use of data in execution, current regulatory environments, and the future of FX trading technologies.
The outlook is clear: while vendor churn may be slowing, client demands are climbing.
To remain relevant, FX vendors must align with institutional goals that now emphasize technological integration, compliance agility, and operational excellence.
Failing to adapt could result in a slow decline, regardless of current satisfaction levels.