April 28, 2026 — Although the expanding presence of nonbank liquidity providers is creating a new layer of liquidity for participants in foreign exchange markets, traditional relationships still stand out.

Nonbank liquidity providers, or NBLPs, are “technology first” organizations. These firms are lauded for their innovation and specialization, and when price is the most important consideration for trading, their growing prominence is causing structural shifts in FX trading.

“NBLPs can provide specialized algorithms and access to unique liquidity pools. For firms looking to execute large or complex orders with minimal market impact, these tools can be a significant draw,” says Audrey Costabile, Senior Analyst in Market Structure & Technology at Crisil Coalition Greenwich and author of FX Spotlight: Buy-side traders focused on best ex, algos and NBLPs.

Approximately one-quarter of FX market participants taking part in a new Crisil Coalition Greenwich study are using or planning to use an NBLP.  Those who use NBLPs cite better pricing models, pricing engines and risk management as key differentiators.

Study respondents say NBLP algo suites have been important in improving the search for liquidity and better automation. Many firms are choosing to access NBLP liquidity indirectly through the algorithmic suites of their trusted traditional bank partners.

“We believe a select group of buy-side firms will pursue direct relationships with NBLPs to maximize their pricing advantage, while a larger contingent will continue to rely on their core banks to curate and provide access to this new layer of liquidity, for the foreseeable future,” says Audrey Costabile.

Bank Algos Dominate FX Trade Execution
Banks are also capitalizing on the growing need for more automated trading. The liquidity and quality of bank algos have skyrocketed, making them the dominant execution method in FX. In particular, the ability of these increasingly sophisticated tools to react to market movements is prized by market participants looking to lower costs on lower-touch trades.

“Bank algos are evolving into adaptive systems that can intelligently work orders, slow down to capture favorable price movements, and speed up to avoid adverse selection,” says Audrey Costabile.

In Turbulent Markets, Relationships Matter
Although price is often king, study findings reveal there is more to be considered when choosing a counterparty. Roughly half of participants believe NBLPs may wind up having a neutral impact on markets as they look beyond pure pricing metrics.

Operational strain and regulatory pressures remain significant concerns for market participants. In this environment, they are seeking relationships with sell-side firms capable of delivering strong and consistent support, infrastructure, and insights.

“While high staff turnover and personnel changes at some banks have led to a perceived loss of focus and market share, dealers with stable, attentive and knowledgeable sales teams are maintaining strong relationships,” says Audrey Costabile.

FX Spotlight: Buy-side traders focused on best execution, algos and NBLPs presents the results of a recent study for which the firm interviewed FX market participants around the world. The report examines key developments in FX markets and analyzes the most important factors the buy side considers when choosing trading counterparties.