Interbank payments network Swift is likely to be the primary beneficiary of FIX uptake by European securities firms, according to a survey conducted by London consultancy City IQ.
The consultancy surveyed 500 individual from 217 organisations representing buy-side and sell-side firms across Europe. Half of the sample say they would be prepared to use FIX over the next-generation IP_based SwiftNet system, attracted by promises of higher levels of interactivity and a single window to market-wide connectivity.
Key attractions to the buy-side were the 'hub' nature of the offering and the secure network, whilst the sell-side also cited the existing Swift user base.
The survey confirmed the growing status of the FIX protocol as the preferred messaging format for inter-firm communications in the capital markets. While only one-third of buy-side firms currently have a FIX capability, an additional 33% expect to adopt the protocol within the next 12 months.
Most of these new adopters are expected to move to the latest version of the protocol, presenting an upgrade challenge to the 30% of sell-side firms not yet supporting FIX version 4.2 says CityIQ.
The survey also tapped an interest in sell-side firms for the use of FIX in mutual funds, with 35% ready to explore uptake. Historically plagued by a paper trail similar to that in the cash business over ten years ago, this too is an area in which considerable efforts are going into improving automation from parties such as Euroclear, Clearstream and Swift.