Brokers may be replaced by machines

The replacement of people with machines is usually justified by large expenses incurred by the former.

Electronic dealing, which accounted for 66 percent of all currency transactions in 2013, will increase to 76 percent within five years, according to Aite Group LLC, a Boston-based consulting firm that reviewed Bank for International Settlements data. About 81 percent of spot trading will be electronic by 2018, Aite said.

Apart from cost reduction, electronic trading has some other benefits as well, such as more transparent pricing and smaller margins in bank operations.

The investigation of alleged manipulation in FX trading is reducing the number of spot traders at many large banks that increasingly opt for their replacement with artificial intelligence. Banks including UBS, Goldman Sachs Group Inc. and Citigroup have already banned dealers from using multiparty chat rooms. Firms such as London-based Barclays have started to cut employees amid a wider squeeze in revenue from fixed income, currencies and commodities.

About 70 percent of Barclays' trading is electronic today, and it is assumed that a good chunk of spot traders (30-40 percent) will have their jobs taken by computers.