In today’s foreign exchange markets, it’s impossible to deny that financial technology is playing a huge part in how the industry functions. FinTech has become an integral part of how forex works, and traders around the world need to quickly adapt to brand new technologies practically every day, but does FinTech really play a part in the revolution of forex and its markets? We think so. Here, we’re exploring just how FinTech is affecting Forex, and what we could expect to see in the future.
Forex In The Mainstream
The opening of a Barclay’s FinTech site in London in May 2017 was proof enough that FinTech is helping all kinds of banking work their way into mainstream use. Forex trading has always been a term that only the knowledgeable trader truly understood, but since the foreign exchange market had a FinTech makeover, it’s been attracting more and more new traders each and every week. The financial crisis in 2008 saw markets struggle, and very few made it out without being effected, and so this rise in orders executed through forex markets is a great sign that it has been recovering itself regardless. 10 years on, the forex markets are bustling with activity and this is all thanks to the mainstreaming of the industry.
The influence of FinTech has seen online trading platforms and trading applications become common practice for countless individuals across the globe, opening forex to universally accessible channels that connect new traders and experienced investors alike.
A World Of Possibilities
FinTech alone is opening up a whole new world of possibilities for consumers and businesses alike. From futuristic lotteries bringing new opportunities to such companies to bigger and better contactless payments, there’s just no predicting what FinTech start-ups will come up with next. Forex is certainly no exception. FinTech is opening up the possibility of forex traders having everything from real-time accounts they can add to and withdraw from for more secure and rapid payments, to increased accuracy in market charts and trade predictions. Analytical tools on all kinds of forex platforms are constantly improving and becoming more sophisticated, which ultimately leads to better risk management, more informed trades, and safer markets as a whole.
Forex Is A Great Show Of What FinTech Can And Does Offer
FinTech start-ups and all of the new technology they’re introducing to the market isn’t always widely recognised by the public, but forex is offering a way for traders and the general public to get a better look at what’s on offer. From account management to transaction technology, our financial services are becoming much more streamlined and far easier to manage on an everyday basis.
Similarly, those already in the industry are able to see improvements in HFT – or High Frequency Trading. While this has previously been nothing but bad for the industry, HFT algorithms are constantly improving. Automation technology is improving every industry, often eliminating the need for human interaction altogether. Robots and computer-programmed algorithms are becoming commonplace in the forex trading industry, giving traders better access to higher volumes of trades but with far less risk involved. The markets have previously been filled with so many false moves and fake traders, that this new, intelligent automation is already improving the legitimacy of the markets. We could see this continue to improve considerably over time, so watch this space!
Managing Forex Risks
The term ‘risk management’ is thrown around freely in all kinds of industries, but very few people, especially traders within forex, truly understand just how important it is or how to put their risk management processes into play. As often as traders are told to plan ahead and be careful with what they trade, this isn’t often done to a significant enough level to truly make a difference. However, FinTech start-ups often focus on risk management as a main concern from the very beginning, and this kind of focus is not only put into their own businesses, but into their products too.
As a result, countless technologies are becoming available in the forex industry for traders and broker’s alike to ensure that markets and assets are well-protected. Risk prediction software, improved analysis, machine learning and much more could all improve how we trade, and what risks we take in the long run. After all, if an analytical program tells us that a market could potentially crash in the near future, we’re more likely to stop and truly think about what we’re doing.
FinTech and forex practically go hand in hand, so it’s truly no surprise that as one grows, so does the other. Improved processes in forex as a result of FinTech are an arguably much-needed change in the industry, but with forex becoming so popular, FinTech start-ups are being given whole new focuses to work towards in the coming years. 2018 has already been a big year for FinTech, and the coming months are only looking to be even better.