The winners take it all?

UBS and Deutsche Bank have perhaps benefited most from this truism – both have surged up industry league tables, leapfrogging other, more traditional FX banks.

But as FX e-commerce continues to evolve, past performance is no guide to future returns, as the saying goes. If all the hype over algorithmic trading proves to be justified, for example, could those who fail to invest now be left out in the cold?

Threats such as these are forcing banks to re-evaluate their technology. Justyn Trenner, chief executive of client strategy firm ClientKnowledge in London, says it is no longer about having, for example, a web interface. "It's about having hooked-up technology that goes all the way from deal capture and trading through to multi-channel FX delivery. One of those channels remains voice, and other channels are different types of electronic outlets."

The pressures and opportunities created by this evolution is compelling a number of clients to re-evaluate their entire technology infrastructure that supports FX, he said.

Unsurprising, then, that UBS might already be in the process of a major technology overhaul, according to sources. The bank is renowned for being at the forefront of technological innovation. It was one of the first to use a bespoke version of the old AVT Technologies' banks-to-client platform EchoFX back in 2000. The system was used, in conjunction with in-house technology, to establish a hugely successful FX dealing system, FX Trader.

Part of an overall upgrade is rumoured to see Cognotec become one of its core technology providers. Yes, that's right, Cognotec. Queries addressed to the Dublin-based technology firm elicit a firm "no comment". But if true, this could spell a seismic shift in fortune for the technology vendor, which has come under fire for perceived faults in its technology in the past 18 months. According to market sources, the vendor has made significant improvements more recently.

"It would be a huge coup if this rumour is true," said one head of FX at a bank in London. "If UBS is looking for a way out, then others might well follow."

However, Reuters commented that UBS remains a valued customer for services covering FX and elsewhere.

When asked about the project, UBS said: "UBS FX has a component-based architecture that uses proprietary technology and external vendors. Cognotec and Reuters are among those vendors, have been for many years, and are expected to remain so in the future." Watch this space...