FX in a Real-Time World: Building The Future Of Currency Execution

For most institutional clients, FX is not where returns are made. It is the mechanism that lets everything else work: settling a trade, hedging an exposure, repatriating a dividend. That executional role has not changed. What has changed is how clients expect it to be delivered.

Speed is the new baseline

Over the past 12 to 24 months, the conversation with clients has shifted decisively toward immediacy. Clients want FX executed closer to real time, with less slippage and lower cost. As technology advances, tolerance for delay shrinks, because every gap between decision and execution is a source of tracking error. Whether the strategy is to track a benchmark, align with a valuation point or outperform, timing of the FX is a real factor impacting performance.  

Scale without an added spread

Citi's FX capability rests on a branch network spanning more than 100 markets and 500 currency pairs, with an on-the-ground presence in 62 countries. That footprint matters commercially as well as operationally. Unlike a typical global custody model that routes through a subcustodian in-market, for most markets Citi leverages our own proprietary branch network.  

This allows Citi’s clients direct access to local market pricing with no incremental spread at the global custody level, and full transparency including timestamps on every transaction. Local presence also brings insights into local market developments and liquidity benefits direct to clients, particularly in markets with meaningful two-way flow.

Investing ahead of demand

Citi is committed to delivering sophisticated FX solutions that help our clients thrive in an ever-evolving global marketplace. To this end, we have successfully migrated all fully convertible markets onto new infrastructure as part of a major replatforming of our Custody FX standing instruction rules (FXSI). Alongside this, we continue to enhance CORE, our Passive Currency Overlay platform, providing clients with robust, automated hedging solutions.

In parallel, we have launched a fully outsourced, end-to-end foreign exchange solution that automates securities-related FX transactions, designed to operate seamlessly regardless of a client’s custodian.  

This powerful new offering provides a comprehensive solution for managing the complexities of currency exchange in global securities transactions. By decoupling FX from custody, Citi empowers clients to leverage the breadth of Citi’s branch network to streamline their operations, enhance performance, and reduce costs without altering their existing custodial relationships.  

Initially available to support 35 currencies across 60+ markets, there are plans to expand the services to additional currencies. New workflow solutions have also been built specifically for ETF and fund managers to reduce tracking error and slippage.  

Toward instant FX

The direction of travel is unmistakable: clients increasingly want to price and settle around the clock, unconstrained by traditional trade windows. Digital asset technology points toward instantaneous settlement, though funding still has to be in place to make that real. AI is already being woven into how Citi's development, product and operations teams work, with the potential to improve price discovery strategically.  

None of this is capability for its own sake. The goal is to co-create with clients, solving the specific problems they raise rather than building features in isolation. That is ultimately the point. As FX keeps moving toward real time, our client-first position is what will define the next chapter.