New York regulators have found evidence that Barclays Plc and Deutsche Bank AG may have used algorithms on their trading platforms to manipulate foreign-exchange rates, a person with knowledge of the investigation said.

The practice suggests there may be a systemic problem involving automated tools that goes beyond individuals colluding to rig currency benchmarks and take advantage of less sophisticated clients.

The algorithms' use is being scrutinized by the New York Department of Financial Services, said the person. The investigators are looking into the practice at each bank and it isn't clear if there's a link between the two, according to the person, who asked not to be named because the matter isn't public. The algorithms were embedded in Barclays's BARX trading platform and Deutsche Bank's Autobahn system, according to the person.