Whilst one of the most challenging years in history was drawing to a close, Finance Magnates was joined by Dáire Ferguson, CEO of online retail broker AvaTrade, to reflect on 2020 and what opportunities 2021 holds for the industry.
It has been an interesting year for AvaTrade and for the markets in general. If I can start with what challenges and opportunities, from staff under lockdowns to negative oil, have both you and the industry faced because of COVID-19?
The pandemic has certainly been one of the most challenging events in recent history, and its impact will be felt across every industry for some time yet. The outbreak of COVID-19 and the ongoing repercussions has hugely affected the financial markets and damaged certain stocks.
While the swings in prices have been tricky for companies to manage, overall, for the online trading industry, the higher levels of volatility have been a great benefit. The potential for traders to take advantage and profit handsomely from the rises and falls of stock prices have been tremendous, and the lockdown period earlier this year meant that many people had more time on their hands to learn a new skill.
At AvaTrade, we had already anticipated seeing a significant increase in our userbase in 2020 given the new jurisdictions and product launches, but there was a substantial uptick in our user registrations when the bank reduced interest rates further and the lockdown hit. I know this experience echoes with many other retail brokers, so in general, I’d say our industry has done a great job of maintaining its resilience in what has been a very challenging year.
This year has also been a tremendous year of growth for AvaTrade. You already have multiple international offices and have now recently added a new Poland office and the Category 3A licence from Abu Dhabi. Can you expand further on AvaTrade’s regional growth plans and what regions excite you the most? Are other acquisitions part of the plans for 2021?
It is true that 2020 has been a great year for us, and we have been focusing a lot on our regional growth. We are now currently regulated in nine jurisdictions, and our expansion into Poland and the Middle East has been a major milestone for us after seeing these regions’ economies grow significantly over the last few years.
We are proud to say that AvaTrade is the first broker to have been issued with a full Category 3A licence from Abu Dhabi Global Market Authorities (ADGM). This means we can service both retail and professional clients, giving us an incredible opportunity to further strengthen the AvaTrade brand in the UAE and the Middle East as a whole.
AvaTrade prides itself on safety and regulation, so we’re always on the lookout for the next opportunities that we can capitalise on and ways in which we can expand. As for sharing our plans for 2021 and what acquisitions we’ll make, or where we’ll open a new office next, that’s not something I can disclose just yet! But, we are definitely preparing to have an even bigger year and continue the strong momentum we have had in 2020.
It feels like barely a month goes by without Finance Magnates reporting the launch of a new AvaTrade product. You have recently introduced AvaSocial, AvaOptions and AvaProtect to name just a few. What has been the reaction to the new product launches and what can we expect in 2021?
Indeed, we have been busy this year rolling out new products to make the online trading environment more exciting, innovative, and crucially accessible for our clients. For our more seasoned users, our vanilla options trading platform – AvaOptions – has been hugely popular as it enables traders to easily configure and execute a wide range of strategies. We are also seeing more of our customers, both new and experienced, equipping themselves with our new risk management tool, AvaProtect, to safeguard their positions in this climate of high risk and high reward. We have only recently launched our new social trading platform, AvaSocial, so it’s still early days on that one, but the response for that too has been extremely positive and encouraging.
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At AvaTrade, we like to see our clients succeed and offer as much support as possible across our platforms, as increasingly we are seeing people seek openness, security and convenience in all aspects of their lives. Moving forwards into 2021, our customers should expect to see a bigger focus on the technologies that allow for more flexibility and improve our platforms to ultimately enhance the user experience for retail traders and keep them with us.
This year, the FX industry has seen a whole new generation of traders onboarded. What can be done to keep these new traders, the ‘zero-free’ generation, within the ecosystem post-COVID-19?
Naturally, customer retention is one of our top priorities, and we want to keep as many of the new users we gained in 2020 as possible as we move into the new year and beyond. We would strongly recommend that anyone new to trading should take advantage of the various risk management tools and social trading platforms that are available to them, such as AvaProtect and AvaSocial.
Such tools and platforms can be a great jumping off point in helping those less experienced to “learn while they earn” and get to grips with the financial markets. They can also be great for boosting confidence as knowing you have a cushion to land on and a community to turn to should any positions not go to plan will certainly help traders feel more comfortable in executing their strategies.
Alongside AvaTrade’s risk management tools and social trading platform, we provide our customers with up-to-date online education services which includes daily videos, informative articles, podcasts, webinars and much more. We really want to ensure our customers are making informed decisions and can hedge the risks they take as we strongly believe the more successful our customers are, the more successful AvaTrade will be.
Finally, a timely opportunity to look back and look ahead. What have you learned from such a unique 2020 and, with Brexit and regulatory bodies globally tightening the rules, what trends are we going to see next year for the trading world?
We have already discussed how much the pandemic has impacted the markets this year, but we have also witnessed major political events that have led to high levels of volatility. The lead up to the US elections in November saw the global markets swing with almost every new headline it seemed, but since the result has been confirmed, we have started to see a notion of market stability return.
In the UK, the Financial Conduct Authority (FCA) has recently made the divisive decision to ban the sale of crypto derivatives to retail clients from January 2021. The announcement comes alongside what is already a turbulent economy for the UK owing to the ongoing impact of COVID-19, and, of course, Brexit, which endures being one of the biggest political challenges facing Europe.
High levels of volatility will clearly be the recurring theme for 2021 as well, and with that, we expect to see more regulations. By introducing safer regulations, users will ultimately be better protected which should lead to existing customers continuing to trade and new customers having the confidence to take the plunge into the online trading world.
Thanks to Dáire Ferguson, CEO of AvaTrade