– Giorgi Mikhelidze
We are all very well aware of the connection between financial technology and the financial markets. All of them are now dependant on the innovations that thousands of developers keep pumping out almost every single year.
However, many people have gotten so accustomed to having this type of system that they have forgotten how it actually worked in the past. The scale which we have reached in the 20th century would have been completely unfathomable just a couple of decades ago, and the accessibility of different currencies would have boggled everybody’s minds.
Nowaday’s all it takes to buy a very exotic and far-distance currency is a bank account or a Forex broker account and you’re good to go.
Let’s just try and take a look at the general growth of volume that may have happened once new technology was added to the financial markets.
Volume and speed
First, let’s take a look at the volume. Although today’s FX volume is generally dominated by institutions such as banks and funds, it’s still worth noting that the retail market is also contributing to the price changes.
Before fintech, there was pretty much no such thing as the retail FX market. Ordinary citizens either did not concern themselves with FX trading, or they would just deposit their money with institutions, which would then trade with them.
Furthermore, fintech helped with the accessibility of FX to slightly less wealthy traders as well. The introduction of the forex no deposit bonus and the development of demo accounts skyrocketed the number of potential traders to a point where everybody with an internet connection could participate in the largest and most important market in the world.
FX trading started to mean almost instantaneous transactions and a better understanding of the economy rather than a hasty purchase of foreign currencies and their storage until an opportune moment.
It introduced a completely new business
The introduction of fintech to FX opened up opportunities not only to the regular citizens trying to make a quick buck off of the market but also to numerous companies willing to provide this service. That is one of the main reasons we get branded services such as the FXTM bonus or various other demo accounts provided by popular financial companies.
According to 55brokers, forex companies started to dominate the financial markets almost instantaneously. Thanks to the sudden surge in volume from interested retail investors, many currencies started to quickly tighten up and increase in value over time, thus giving the first-comers of the markets a headstart.
This initial success of people that entered the markets is still an encouraging factor today, or so to say a marketing tactic used by the first brokers to make more and more people interested in their services.