The continued COVID-19 outbreak is causing the global financial system to experience upheaval and that has seen an impact on the Financial Services industry, especially for those operating in the online trading industry, and it is expected that this will have an impact for several years.
The increase in online activities is a direct result in the forced quarantining on a globally scale and this has resulted in a massive jump in almost every class of assets, which ultimately will see an increase in Q1 profits
Swings in Markets Not Experienced Like it for a Decade
COVID-19 has been a major factor in the increase of online trading. This has seen stock markets, cryptocurrency, commodities, and FX experiencing volume spikes. The current uncertainty is attracting investors and the fall out in the stock market has seen a range of investors from those just entering the market to those who are veterans, and even the big fish.
Beginning in February and remaining consistent through March, the world has witnesses markets collapsing including the U.S stock market and the price of oil. The U.S S&P500 index suffered a 35% drop over the course of one month, while the price of gold went through the roof with investors doing all they could to buy gold, and that was aided by an increase in crypto buyers after they saw its value tank.
Those that are looking towards capitalizing on daily market swings and trades are doing so by identifying those lucrative trading opportunities that are lucrative. Many of those that have an instinct and paid attention to the market aced based on analysing of the situation.
Online Trading Will Be At the Top Beyond 2020
The shift has allows the online trading industry to be in a unique positon as it is easily accessible to satisfy the demand for financial instruments. Exchanges of al classes are reporting substantial volume increases and the retail sector, now couldn’t be a better time to get into the online market trading space.
This not only includes your average investor or company who are interested in opening a brokerage or that of a new brand as an extension of an already existing platform. That is resulting in the industry seeing interest levels towards the retail space in numbers never seen in the past and call centres are focusing on expanding their efforts and focusing their time providing support towards the online financial side of their business.
As a result, the demand for brokerages and their related services within the Fintech industry is booming, and that is not just the large brokers but also the smaller ones. They have an advantage over traditional banks as a result of the aforementioned charging higher fees.
Another providers in the industry, Smartologic Technologies has seen their business impacted in a positive way in terms of the solutions they provide to Fintech related call-centers. Speaking on this, the CEO of Smartologic Technologies, Dror Lupu said,
“If you aren’t in the online trading industry then you are looking to get in. All-in-one CRMs or white labels are the name of the game with venues looking to capitalize on this demand.”
The positive to COVID-19, if there is to be one, have been the discovery of this market with the positive being people who were unaware of it or hesitant have now made the jump due to favourable being favourable. The recent changes in ESMA regulations also made it an environment that is seen as more friendly and that will see current trends staying as they are for quite some time, with many predicting it will remain for the next year or more.
This is due to brokers being in a better positon that previously to ward off any cyber threats, which is an increasing problem. It could very well be one of those situations that is a one in twenty year opportunity, which is why many are jumping on board hoping to cash in down the road as markets recover.