How AI Could Transform the FX Market: Q&A with Orhan Ural, CEO of FTD Limited

From machine learning to generative AI, artificial intelligence is entering our lives at a very fast pace. AI is making a real difference in the business world. Most sectors are trying to catch the AI train to increase productivity and maintain their edge in the market. This applies to the FX market as well, for both traders and firms.

In a recent discussion with Orhan Ural, the founder and CEO of FTD Limited — a financial services provider that has worked with the FX industry for almost eight years — I explored how AI is poised to transform the FX market.

Q: Orhan, you have been following the developments of the FX industry, its moves and changes for almost a decade now. From your perspective, how does AI impact the FX market today?

Orhan Ural: “AI is entering our lives at a very fast pace, and it's significantly impacting the business world overall, not only the FX sector. We already notice many potential developments that might impact not only Forex but also other trading instruments that are very popular among traders and investors. We all know now that AI developments have no clear limits; therefore, we can only analyse what we have already noticed and prepare for what the future holds.”

Q: Can you be a bit more specific about what traders should look into today when trying to apply AI in their trading strategy?

Orhan Ural: “Algorithmic trading is the first thing that comes to mind when talking about AI. Traders have long sought an edge to achieve steady profits through systematic and algorithmic trading. However, the market is constantly changing, making previously profitable systems obsolete. AI helps by analyzing vast amounts of data and identifying connections that humans might overlook, creating models that adapt to changing environments. However, success still hinges on human factors and competition. With more AI systems trading, competition among AIs will increase, just as the rise of algorithmic trading made old-school systems obsolete.”

Q: You mentioned that AI helps with gathering data. How can it potentially help traders?

Orhan Ural: “With generative AI, information gathering has taken a huge step forward. AI systems can scour the web to find relevant information and create summaries quickly. It can be used to check market-changing news or social media sentiment and link with advanced algorithmic trading systems. For instance, AI can analyse FOMC minutes, review past market reactions, generate trade recommendations and even execute trades on behalf of traders. Brokers can also use generative AI to create higher quality research reports or articles.”

Q: What advancements does AI bring to customer service in the FX market?

Orhan Ural: “While many firms use basic chatbots, AI can provide more detailed information, efficiently connect customers with the right personnel, track personal preferences and tailor assistance as needed. This significantly enhances the user experience.”

Q: I suppose not only customer services but also other valuable departments in FX firms can make use of AI?

Orhan Ural: “Definitely! Just as an example, AI already aids human resources in various ways. It helps identify the best candidates from resumes, facilitates communication regarding employee files and determines training needs based on performance evaluations. AI can also generate enhanced orientation videos.”

Q: From my knowledge, FTD offers liquidity services as well. In what ways does AI improve liquidity management in the FX environment?

Orhan Ural: “FX firms can manage vast liquidity transfers and incoming positions with the help of AI systems. During high-activity periods, AI can efficiently manage liquidity flows with minimal risks, assisting treasury departments in handling these operations.”

Q: And what would you say about the role of AI in risk management for FX traders and firms?

Orhan Ural: “Traders can use AI for real-time risk management, employing various risk models to assess incoming data against historical market reactions. This allows for detailed risk assessments on a daily, hourly or even minute-by-minute basis. For FX firms, AI helps manage liquidity risks, portfolio risks and customer position risks, providing valuable support to treasury and portfolio departments.”

Q: How does AI contribute to compliance in the FX market?

Orhan Ural: “As we have already noticed, AI enhances compliance by monitoring transactions, reporting violations or suspicious activities, creating alerts and generating compliance reports.”

Q: Sounds like you have a very positive and supportive mood towards artificial intelligence overall. Does FTD already have an approach to integrating AI within the FX market?

Orhan Ural: “At FTD, we are committed to using all available AI technology to support our customers and increase our internal efficiency. We have already implemented AI in various ways, including many points that we have discussed above, such as in human resources, liquidity management and providing APIs for AI-adopting traders.”

Q: What would be your conclusion to this topic?

Orhan Ural: “The only conclusion I would draw is that the potential use of AI in the FX markets is limited only by human imagination. I sincerely hope we can harness its potential to benefit both the FX industry and humanity as a whole.”