Globalisation has created massive growth in foreign exchange trading, especially in emerging markets. We asked Phil Horner, at leading foreign exchange (forex) broker Pepperstone, about the challenges and opportunities for the sector.
Headquartered in Melbourne, Pepperstone offers forex solutions across the UK & EU, China and Australia.
What has driven growth in forex in the last few years?PH: Taking trading online means that trades can be offered at a lower cost, which encourages more people to engage. Lower costs make it possible to help more individual investors buy and sell foreign currencies. The individual trading amounts may be lower, but volumes are much higher. Take any service online and customers want a service that is available 24/5, regardless of where they are located when they decide to trade.
What about the customer experience?
As online users, we want instant service, delivered safely and with minimal hassle. We want to capitalise on market fluctuations, especially as things are so volatile now. We want to trade instantly without huge costs. Electronic ID verification is widely available, so onboarding a new client is faster. To open an account, deposit funds and start trading should take no more than six minutes.
Are the regulators making things more difficult?PH: Anti-money-laundering and Know Your Client checks are mandatory almost everywhere. That can make trading globally a challenge. We’ve found that solutions like GBG’s help ensure a consistent customer experience, wherever they originate.Local regulators in some territories have considered banning forex. They see it as riskier than trading stocks. But the technology to do things right is improving all the time. Innovation in AI and machine learning will improve things further. Organisations can fully comply on things like anti-money laundering without creating a horrible customer experience.Forex providers should focus on the opportunities technology presents. Automated trading allows you to execute trades 10 times faster than previously, complete with a fully compliant audit trail – and who wouldn’t want that?