WU, Saxo, Amex Take Corporate FX Market Share From Big Banks

U.K. banks — and large banks everywhere — are losing market share in their corporate clients’ FX needs, new data revealed.

According to reports Wednesday (Jan. 11), East and Partners found that, across 2,000 SMEs and large U.K. companies, the volume of foreign exchange services business conducted with U.K. banks has declined — as has the number of companies using a U.K. bank as their primary provider of FX services.

While Barclays, HSBC and Lloyds remain on top in terms of corporate FX services market share, all three lost market share in 2016. It marks the second year in a row this has happened, researchers noted. Barclays now holds 14.3 percent, HSBC holds 13.5 percent and Lloyds holds 10.6 percent of the market share, according to East and Partners.

These declines aren’t only felt by the U.K.’s largest financial service providers. Reports said smaller lenders also saw their market shares drop, with ING, Bank of America Merrill Lynch and Bank of China making up the only “mainstream” banks that saw their market shares climb.

Non-bank providers are taking that market share away from traditional banks, the report said. U.S. company Western Union holds the top spot in providing corporate FX services, with a 3.4 percent market share — up from 3 percent. Saxo Bank and American Express are also in the top five among non-banks.

“High Street banks continue to hold more than half the market but, at best, saw no growth or decline in their share,” reflected Simon Kleine, East and Partners’ head of client servicing. “Some international banks have seen small increases in share, and there’s been a resurgence in growth by many non-bank providers.”