Due to recent technological advancements, the way retail traders make trades has changed significantly. In the world of banking and investing, new technologies have allowed people to make quick decisions in the market and drastically improved a trader’s ability to perform accurate analysis of trades. The forex market is no different, and the impact that fintech has had on trading foreign exchange is clear.
What is fintech?
Fintech stands for financial technology. It encompasses the financial services and the technology that assists in using these financial services. Fintech comes in many forms, and you may not be aware that you are likely using it every day. If you use a mobile banking app, you are using a form of fintech. Any type of online payment is also considered a form of fintech, and if you use an online platform such as tradingview for trades, then you are also using fintech.
Thanks to technological improvements in recent years, many more people have access to things like smartphones that give access to the world of online banking and trading. Billions of people around the globe can manage their savings and funds from the comfort of their homes and have become independent in making decisions with their own money. The fintech industry offers a vast range of services, including things like secure payments, e-wallets, digitalized banks, and instant transactions, all helping to improve accessibility and control of your own money.
Additionally, the fintech industry has drastically improved how people can participate in investing and online trading. You no longer have to phone your broker to place a trade that can take days to process. You can use your smartphone to make instant trading decisions and take advantage of market opportunities. By just going back three years, the growth of the fintech industry is evident. In 2020 alone, there was an 85% increase in the number of people using fintech apps, and in 2021 the number grew by an additional 49%. It is likely that the growth of the fintech industry will only increase as more advancements in technology are made and more people gain access to mobile phones.
What drives fintech in investment and trading?
One of the biggest changes that fintech caused was the increased accessibility to people inexperienced in utilizing financial services. Suddenly anyone with a smartphone could access and use various investment platforms and set up accounts to manage their savings. In addition, the amount of information available to the average person enabled less experienced individuals to learn how to trade effectively and perform accurate analyses of different markets.
The impact that fintech will continue to have on investment and trading is expected to increase significantly, with the next generation being more competent in managing their investments. The ways people around the world invest their money have changed forever, and trading online is expected to increase even more as the space grows and more people participate.
The role of technology in forex trading
Technology plays a crucial role in many different aspects of forex trading. For those relatively new to the world of forex, it may be difficult to spot this; however, for those that have been trading forex for several years, the changes are obvious. Nowadays, technology drives a huge amount of financial technology. For example, it is essential for making transactions, managing accounts, as well as analytics and reporting.
Recently, technological advancements have increased the number of options for users, who can make trades more easily by incorporating banking into the system. Additionally, it has become more beginner friendly, which means people that don’t have a lot of experience can pick up most aspects of the forex market and understand the main concepts. This has enabled many more people to participate in trading forex and has led to a massive increase in the daily trading volume of the global forex market.
The recent explosion of the internet has drastically improved traders’ ability to access powerful trading tools and discuss opportunities with like-minded individuals. This has allowed people to learn how to trade no matter their knowledge level, as there are guides for all different kinds of traders. People can share ideas more easily with other traders around the world, meaning that forex market analysis by traders has also improved. You no longer have to rely on your own judgment; you can have long discussions with other traders and understand different perspectives on the market to aid your analysis.
The future of forex trading
As technology continues to improve, with things like machine learning and AI becoming more incorporated into trading, it is easy to see that the forex market will also grow substantially. The number of apps and platforms available to users will also increase, so traders have more options to decide how they want to trade forex.
This article was provided by Janine Ubal
