Lloyds Is Said to Boost Algos at FX Desk in London by 2019

(Bloomberg) -- Lloyds Banking Group Plc plans to modernize parts of its trading room in London by increasing the use of machine-trading to meet the demands of clients, according to people with the knowledge of the project.

The algorithms will mainly be used for the currency desks as clients are increasingly asking to operate through the technology in line with rivals, said the people who asked not to be identified because the matter is private. The demand is coming mainly from largest corporate and financial institutions clients, which uses the services through the bank in different currencies, the people said. A spokeswoman at the bank declined to comment.

Trading with algos has become increasing popular in recent years as it boosts speed and the transparency in the execution of orders. Lloyds, a retail-focused lender which took about 20 billion pounds ($28 billion) of U.K. taxpayers’ money to prevent its collapse almost a decade ago, is catching up with the top banks that have already largely implemented the technology and plan to invest more than 3 billion pounds in IT in the next three years.

The project is expected to be up and running by next year, the people said. Lloyds is leaning towards buying the technology rather than building it by themselves, they said. A final decision hasn’t been made, one of the people said.

The algos project is one of the steps Lloyds is taking to refresh its dealing room at in the City of London. The lender has created glass boxes to isolate its traders in response to the ring-fencing rules, which requires a separation of the riskier activities from the core business, Bloomberg News reported in January. Following the installation of the glass partitions, the trading floor is now unusually silent, a person said.

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