As we step into 2026, the world of foreign exchange (FX) trading is undergoing a significant transformation. With the rise of artificial intelligence, data analytics, and changing market conditions, FX trading desks must adapt to remain competitive. In this article, we’ll explore the key areas that desks should prioritize when it comes to future-proofing.

## Harnessing the Power of Data

Data is the lifeblood of any successful trading desk. To harness it effectively, desks must ensure that their data is high-quality, easily accessible, and that their team can interpret and apply it. One crucial aspect of data is Trade Cost Analysis (TCA), which provides valuable insights into transaction costs, execution quality, and market impact. By analyzing post-trade TCA, desks can challenge their liquidity providers, giving both positive and critical feedback that will result in stronger relationships and better execution in the future.

But TCA is just the beginning. Desks should also combine post-trade TCA with real-time analyses of volatility, market depth, and current spreads to optimize their execution. This requires a deep understanding of market dynamics and the ability to make informed decisions quickly. By doing so, desks can stay ahead of the competition and achieve their goals.

## The Rise of Artificial Intelligence

Artificial intelligence (AI) is revolutionizing the world of FX trading, and Manulife Investment Management is at the forefront of this revolution. According to Peter Welsby, head of Europe FICC trading at Manulife, AI can enhance trading desks’ value by automating tasks, identifying trade opportunities, and providing real-time market insights. However, Welsby emphasizes that AI is not a silver bullet and should be used carefully, particularly in areas such as risk management and trade execution.

To get the most out of AI, desks need to partner closely with their AI development teams to drive results closer to something immediately useful and beneficial. This requires a deep understanding of both AI technology and the FX market, as well as the ability to evaluate the work product and make informed decisions. By doing so, desks can create a hybrid skillset that combines the expertise of human traders with the power of AI.

## The Importance of Talent and Culture

FX trading desks of the future require a new kind of talent – a hybrid skillset that combines technical expertise, market knowledge, and human relationships. According to Welsby, the ideal trader is part technologist, part strategist, part market psychologist, and part diplomat. To build a successful trading desk, desks need to prioritize diversity of skills, empower their traders, and create a culture that fosters engagement, fun, and empowerment.

By doing so, desks can create a resilient and effective trading desk that can navigate the challenges of the FX market. This requires a deep understanding of the market, a strong team culture, and a willingness to adapt to changing conditions. By future-proofing their desks, desks can stay ahead of the competition and achieve their goals.

## Partnerships and Alpha Generation

Looking to the future, FX trading desks must prioritize partnerships and alpha generation. Externally, desks must remain aware of fintech and technology offerings and cultivate trust-based relationships with liquidity providers. Internally, strong relationships with portfolio managers are essential, and desks should strive to build trust through regular interactions and a deep understanding of their needs.

By doing so, desks can create a trading floor with energy and engagement – a place where people want to come to work, share ideas, and build relationships. Ultimately, when people are having fun and feel empowered, it increases the likelihood of them wanting to stay with the team and how they perform on the team. That combination of skill, culture, and engagement is what truly builds a resilient and effective trading desk.

As we look to the future, one thing is clear – the world of FX trading is changing rapidly. To succeed, desks must adapt to new technologies, changing market conditions, and evolving regulatory requirements. By prioritizing future-proofing, harnessing the power of data, and leveraging AI, desks can create a hybrid skillset that combines the expertise of human traders with the power of technology. By doing so, they can create a resilient and effective trading desk that can navigate the challenges of the FX market and achieve their goals.