Volumes undertaken on these platforms have risen from an average of about $7bn a day in May 2002 to closer to $14bn a day in October, representing approximately seven per cent of the large corporate and institutional market, says ClientKnowledge.

Approximately half of this business is conducted over State Street's FX Connect system, which is averaging some $7bn daily on 4000 individual trades. These transactions are typically batched into blocks of around $30m and consist mostly of spot deals.

Independent portal Currenex is estimated to handle some $3.5bn daily on 450 individual trades, while bank-owned FXall brings up the rear with $3 billion daily on 850 individual trades. Transactions over Currenex and FXall reflect a reasonably balanced mix of spot and swaps business.

In financial terms, ClientKnowledge CEO and Principal, Justyn Trenner, estimates that State Street is perhaps 70% or more of the way to viability, while Currenex and FXall still have some way to go.

"State Street has used its platform to support a dramatic rise in FX trading revenues, so FX Connect has clearly reached viability and is here to stay," he says. "Currenex charges buy-side subscriptions and so, if present growth rates are sustainable, should get there in the next six months. The challenge is on for FXall to build its position if it is to succeed over the next year. At the same time, the push (and expenditure demand) is now to add broader product capability to maximise returns."

ClientKnowledge estimates that single bank sites are carrying around 30% more business than the multi-dealer platforms today, suggesting that online FX accounts for more than $30bn of wholesale customer activity on a typical day, or above 15% of the market.

"These quantities are too large to ignore and the banks have to figure out which channel offers the best way to service each of their client segments," Trenner observes.